Budget 2026: FM Sitharaman announces ₹10,000 crore SME growth fund

Union Budget 2026 proposes ₹10,000 crore SME growth fund and expands TReDS-backed liquidity measures and compliance support to help small businesses scale up and improve access to finance

In her Union Budget for 2026-27, Finance Minister Nirmala Sitharaman on Sunday proposed a ₹10,000 crore scheme to support small and medium enterprises (SMEs). Calling SMEs a key engine of growth, she outlined a three-pronged approach to help them scale up and emerge as “champion” enterprises.

Equity support

Under the equity-support pillar, Sitharaman proposed the launch of a dedicated ₹10,000 crore SME Growth Fund aimed at nurturing future champions by incentivising enterprises based on selective criteria. She also proposed a ₹2,000 crore topup to the Self-Reliant India Fund, set up in 2021, to continue supporting micro enterprises and maintain their access to risk capital.

 

Liquidity support

Highlighting the role of the Trade Receivables Discounting System (TReDS), the finance minister said more than ₹7 trillion had been made available to MSMEs through the platform so far. To expand its impact, she proposed four measures:

• Mandating TReDS as the transaction platform for all purchases from MSMEs by central public-sector enterprises, setting a benchmark for other corporates.
• Introducing a credit-guarantee mechanism through the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for invoice discounting via TReDS.
• Linking the Government e-Marketplace (GeM) with TReDS to share information with financiers on government procurement from MSMEs, enabling faster and cheaper financing.
• Developing TReDS receivables as asset-backed securities to create a secondary market, improving liquidity and settlement of transactions.

Professional support

Sitharama further said the government would also work with professional bodies such as the Institute of Charted Accountants of India (ICAI), Institute of Company Secretaries of India (ICSI) and Institute of Cost Accountants of India (ICMAI) to design short-term modular courses and practical tools to build a cadre of “corporate mitras”, particularly in Tier-II and -III towns. These accredited para-professionals would help MSMEs meet compliance requirements at an affordable cost.