India Union Budget 2026: FM Sitharaman announces allocation of Rs 10,000 crore for SMEs
&imwidth=600&imheight=450&format=webp&quality=medium "India Union Budget 2026: FM Sitharaman announces allocation of Rs 10,000 crore for SMEs")
Indian Finance Minister Nirmala Sitharaman Photograph: (ANI)
FM Nirmala Sitharaman announced a Rs 10,000 crore SME growth fund and Rs 2,000 crore top-up for micro firms in Budget 2026–27, alongside TREDS reforms and higher public capex to boost jobs, credit and growth.
Indian Finance Minister Nirmala Sitharaman announced an allocation of Rs 10,000 crore to small and medium enterprises (SMEs) during the Union Budget 2026-27 presentation in the Lok Sabha on Sunday (Feb 1). The move will help in creating future jobs and incentivising enterprises based on select criteria for the businesses.
“I propose to introduce a dedicated 10,000 crores SME growth fund to create future champions, incentivising enterprises based on select criteria. I also propose to top up the self-reliant India fund set up in 2021 with 2,000 crores to continue support to micro-enterprises and maintain their access to risk capital,” she said.
Currently, there are more than one crore registered MSMEs, employing 7.5 crore people, and generating 36 per cent of India’s manufacturing. These enterprises have positioned India as a global manufacturing hub. More than Rs 7 lakh crore has been made available to MSMEs through liquidity support.
Sitharaman further added, “To leverage its full potential, I propose four measures. One: mandate TREDS as the transaction settlement platform for all purchases from MSMEs by CPSEs. Survey as a benchmark for other corporates. Two: introduce a credit guarantee support mechanism through CGT-MSC for invoice discounting on the TREDS platform. Three: link GEN with TREDS for sharing information with financiers about government purchases from SMEs, encouraging cheaper and quicker financing. Four: Introduce TREDS receivables as asset-backed securities, helping develop a secondary market, enhancing liquidity and settlement of transactions.”
Sitharaman also noted that the government shall continue to focus on developing infrastructure in Tier II and Tier III cities that have a population of more than 5 lakh. These cities have expanded to become growth centres of the country.
The public capital expenditure has increased manifold from Rs 2 lakh crore in 2014-15 to an allocation of Rs 11.2 lakh crore. In the financial year 2026-27, Sitharaman proposed to increase it to Rs 12.2 lakh crore to continue the momentum.
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