Union Budget 2026: Finance Minister Nirmala Sitharaman Announces Rs 10,000 Crore SME Growth Fund

Union Budget 2026: Finance Minister Nirmala Sitharaman on Saturday announced a series of measures to strengthen India’s micro, small, and medium enterprises (MSMEs), proposing a dedicated ₹10,000 crore SME Growth Fund aimed at job creation and nurturing future business champions. 

The minister underlined that MSMEs remain a key driver of economic growth and said the government has adopted a three-pronged strategy, including equity support, to help the sector scale up.

₹10,000 Crore SME Growth Fund, Support For Micro Enterprises

“I propose to introduce a dedicated ₹10,000 crore SME Growth Fund to create future champions, incentivising enterprises based on select criteria,” Sitharaman said while presenting the Union Budget. She also announced a ₹2,000 crore top-up for the Self-Reliant India Fund, set up in 2021, to ensure continued risk capital support for micro enterprises.

According to the Finance Minister, more than ₹7 lakh crore has already been made available to MSMEs through various liquidity support measures.

TReDS Reforms To Improve MSME Cash Flow

To unlock the full potential of MSMEs, Sitharaman proposed four major reforms to the Trade Receivables Discounting System (TReDS). These include making TReDS mandatory for settlement of all CPSE purchases from MSMEs, introducing credit guarantee support for invoice discounting, and linking the Government e-Marketplace (GeM) with TReDS to enable better information sharing with financiers.

In a significant move, she also announced that TReDS receivables will be converted into asset-backed securities, helping develop a secondary market and improve liquidity and faster settlement of MSME transactions.

Capex Push, Focus On Tier II And Tier III Cities

The Finance Minister said the government will continue to prioritise infrastructure development in Tier II and Tier III cities with populations exceeding five lakh, positioning them as new growth centres.

Public capital expenditure has seen a sharp rise from ₹2 lakh crore in 2014-15 to ₹11.2 lakh crore in the current year. For FY 2026-27, Sitharaman proposed increasing capex further to ₹12.2 lakh crore to sustain investment momentum.

Economic Survey Highlights

Sitharaman presented her ninth consecutive Union Budget in Parliament, a day after tabling the Economic Survey 2025-26. The Survey projected India’s real GDP growth for 2026-27 in the range of 6.8–7.2 per cent, indicating resilient medium-term growth despite global uncertainties.

It also noted that India recorded its lowest inflation rate since the CPI series began, with average headline inflation at 1.7 per cent between April and December 2025, driven by easing food and fuel prices. The inflation outlook, the Survey said, remains benign, supported by favourable supply-side conditions and the gradual impact of GST rate rationalisation.

ALSO READ: Union Budget 2026: Meet The Team Of Top Bureaucrats Who Helped FM Nirmala Sitharaman Prepare The 9th Budget, Shaping India’s Economic Vision