Small and medium enterprises have always been described as the backbone of India’s economy. What Budget 2026 does differently is move MSMEs out of that familiar slogan and place them firmly at the centre of India’s next growth phase—not as beneficiaries of relief, but as engines of expansion.

Over the past few years, Indian MSMEs have shown resilience in the face of disruptions ranging from the pandemic to supply-chain shocks. Yet their biggest challenges have remained consistent: access to growth capital, timely cash flows, and the ability to scale without being buried under compliance or financing constraints. Budget 2026 addresses these issues in a practical and forward-looking manner.

One of the most significant announcements is the creation of a ₹10,000 crore MSME Growth Fund, aimed at building future “Champion MSMEs.” Unlike traditional support measures focused on survival, this fund is clearly designed to help promising enterprises scale up, invest in technology, expand capacity, and compete more effectively. This marks a shift in thinking—from protecting small businesses to actively backing their growth journeys. Equally important is the ₹2,000 crore top-up to the Self-Reliant India Fund, which continues to support micro enterprises with access to risk capital. Together, these measures will ensure liquidity support to MSMEs in the form of equity capital.

Cash flow, often the biggest pain point for MSMEs, also receives focused attention. With TReDS platform, Rs 7 trillion opportunity has been made available for MSMEs by mandating its use for CPSE purchases from them and supporting invoice discounting through credit guarantees. By linking government procurement portals with financing platforms and enabling receivables to be securitised, the Budget tackles delayed payments at the root. For a small business owner, faster access to working capital can make the difference between steady operations and stalled growth. Beyond finance, Budget 2026 also addresses a less visible but equally critical issue—capability and compliance support. The proposal to create a network of trained ‘Corporate Mitras’, especially in Tier II and Tier III towns, is a quiet but impactful reform. By helping MSMEs manage compliance and financial processes at affordable costs, this initiative reduces friction and allows entrepreneurs to focus on running and growing their businesses.

All the above measures recognises MSMEs as growth partners in India’s economic story—supported by access to large CPSE market coupled with liquidity support.

The sharp takeaway from Budget 2026 is this: the government is betting on MSMEs not just to create jobs, but to drive productivity, manufacturing depth and regional growth. If implemented well, these measures can help MSMEs expand business sustainably in the volatile global environment.

(The author is MD & CEO, SBICAP Securities Limited. Views are personal.)