India’s federal budget for 2026–27 set out a package of measures for micro, small and medium enterprises (MSMEs), focusing on equity funding, liquidity support and access to professional services, Finance Minister Nirmala Sitharaman said in her budget speech to parliament on Saturday.
Presenting the proposals, Sitharaman said the government would pursue a three-pronged approach to help MSMEs grow as “Champion SMEs”, recognising their role in employment generation and economic activity. The measures were announced as part of the budget’s broader objective of accelerating and sustaining economic growth.
Under equity support, the Finance Minister proposed the creation of a ₹10,000 crore SME Growth Fund to support enterprises identified as future champions. The fund will incentivise MSMEs based on select criteria, according to the budget speech. In addition, the government proposed a ₹2,000 crore top-up to the Self-Reliant India Fund, which was set up in 2021 to provide risk capital to micro enterprises.
On liquidity support, Sitharaman said the Trade Receivables Discounting System (TReDS) has enabled financing of more than ₹7 lakh crore for MSMEs so far. To expand its reach, the budget proposed mandating TReDS as the transaction settlement platform for all purchases from MSMEs by central public sector enterprises, with the intention of setting a benchmark for other large buyers.
The budget also proposed introducing a credit guarantee support mechanism through the Credit Guarantee Fund Trust for Micro and Small Enterprises for invoice discounting on the TReDS platform. In addition, the government plans to link the Government e-Marketplace with TReDS to facilitate information sharing with financiers on government purchases from MSMEs, with the aim of enabling faster and lower-cost access to credit.
Another measure announced in the speech is the introduction of TReDS receivables as asset-backed securities, which the Finance Minister said would help develop a secondary market for such instruments and improve liquidity and settlement of MSME transactions.
To address compliance-related challenges, the budget outlined steps to expand professional support for MSMEs. Sitharaman said the government would facilitate professional institutions, including the Institute of Chartered Accountants of India, the Institute of Company Secretaries of India and the Institute of Cost Accountants of India, to design short-term, modular courses and practical tools.
These initiatives are intended to create a cadre of accredited para-professionals, referred to in the budget speech as “Corporate Mitras”, particularly in Tier II and Tier III towns. According to the speech, these professionals will assist MSMEs in meeting regulatory and compliance requirements at affordable costs.
The Finance Minister said the MSME measures are part of the government’s effort to strengthen domestic enterprises alongside initiatives in manufacturing, infrastructure and other sectors outlined in the budget.