This post was originally published on The Economic Times
The Union Budget 2026-27 places micro, small, and medium enterprises (MSMEs) at the heart of India’s growth and export strategy, recognising their role in contributing nearly 45% to India’s exports and anchoring employment-intensive supply chains. Instead of relying on broad stimulus, the Budget focuses on strengthening the financial rails that support MSMEs by improving capital access, liquidity, and execution efficiency.
A key intervention is the creation of a Rs 10,000-crore SME Growth Fund, alongside a Rs 10,000 crore Fund of Funds and a Rs 2,000 crore top-up to the Self-Reliant India Fund. This marks a shift from debt-heavy support toward equity and quasi-equity capital, which is critical for MSMEs seeking to scale capacity, upgrade technology, and meet global compliance standards. A special credit scheme for women and SC/ST entrepreneurs, targeting 500,000 beneficiaries with loans up to Rs 2 crore, further broadens access to formal growth capital.
Credit risk-sharing has been materially strengthened through the doubling of the CGTMSE guarantee limit to Rs 10 crore for micro and small enterprises, a move expected to
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