Budget 2026: MSME growth fund game-changer for sector, say industry bodies

The proposal to set up a dedicated Rs 10,000-crore growth fund for micro, small and medium enterprises (MSMEs) in the Union Budget 2026-27 will be a “game-changer” for the sector, industry bodies said on Sunday.

The Budget has accorded due importance to MSMEs as a key driver of supply chains, employment and exports, they noted.

MSME Development Forum-West Bengal president Mamta Binani said the announcement comes at a crucial time when the sector is grappling with liquidity constraints, delayed payments and rising competitive pressures.


“The announcement is a monumental stride towards strengthening India’s MSME ecosystem. This visionary initiative will provide crucial capital to help enterprises innovate, modernise and scale, while also tariff-proofing the sector against global trade disruptions,” Binani said.

She said the fund would act as a catalyst for improving competitiveness, expanding access to global markets and enabling deeper integration of MSMEs into domestic and international value chains.

“At a time when MSMEs face intense challenges, this fund, along with enhanced credit access and other structural support measures announced in the Budget, underscores the government’s commitment to unlocking the full potential of the sector, which is the backbone of industrial growth, employment generation and exports,” she said.

Expressing similar views, Federation of Associations of Cottage and Small Industries (FACSI) president H K Guha said the Budget has given due importance to MSMEs, particularly in strengthening their role in the supply chain.

“The budget has addressed key issues through equity support, geographical expansion, creation of an SME growth fund, and by mandating CPSUs to transact through the TREDS platform to resolve receivables,” Guha said.

He also welcomed the proposal to reserve Rs 2,000 crore for the micro sector under the Self Reliant India Fund, and the plan to create ‘Corporate Mitras’ in Tier II and Tier III cities to help MSMEs meet compliance requirements.

Guha said targeted support for the textile and leather sectors would help offset stress arising from higher US tariffs.

Binani added that the measures would promote inclusive growth, strengthen sectoral resilience and contribute to building a self-reliant MSME ecosystem in the country.