The Union Budget 2026 places MSMEs and long-term investment at the heart of India’s growth strategy, shifting the narrative from survival-driven credit to scale-oriented capital access. With a strong push towards equity support, faster payment cycles, digital credit infrastructure, and deeper market linkages through platforms like TReDS and GeM, the Budget signals a structural reset for small businesses and first-time founders. Special emphasis on Tier 2 and Tier 3 cities, women entrepreneurs, and underserved communities further reinforces the government’s intent to democratize entrepreneurship and unlock sustainable, inclusive growth. Industry leaders share their views on how these measures could reshape India’s MSME and investment landscape in the years ahead.
HIGHLIGHTS
- Credit schemes for MSMEs
- Corporate Mitras Cadre
- SHE Marts for women
- Revision in the buyback tax framework
- Strengthening the GENESIS programme, Fund of Funds & Seed Fund schemes
- Special emphasis on Tier 2 and Tier 3 cities, first-time founders, women entrepreneurs & SC/ST-led ventures
- Mandating TReDS for CPSEs
- Extension of CGTMSE support
- GeM–TReDS integration
- Proposal to introduce trade receivables as asset-backed securities
The Tech Panda asked MSMEs and startups what they thought of the Union Budget 2026.
Ketan Gaikwad, MD & CEO, RXIL
”Mandating TReDS as a transaction / settlement platform by CPSEs is a welcome move, as it will not only ensure timely payments and competitive financing rates for MSMEs, but also provide the government with a transparent, system-led view of MSME payment cycles across CPSEs, setting a strong benchmark for other corporates to follow.
“The proposed extension of CGTMSE credit guarantee support to invoice discounting on TReDS further deepens the availability of working capital for MSMEs and will enable TReDS platforms to onboard a wider and more diverse MSME base.
“Linking the GeM portal with TReDS for sharing information to the financiers will be a major enabler, allowing MSME suppliers access quicker and cheaper financing in a seamless manner, especially when combined with CPSE participation and credit guarantees.
“The proposal to introduce trade receivables as asset-backed securities is a forward looking reform that has the potential to unlock additional liquidity by attracting new classes of investors and developing a secondary market for MSME receivables. We look forward to further details on this framework and believe it can meaningfully enhance market depth, liquidity, and settlement efficiency for MSME financing in the years ahead.
“By strengthening the digital credit infrastructure and improving capital efficiency across the MSME ecosystem, TReDS emerges as a critical enabler of inclusive growth and a foundational pillar in India’s journey towards Viksit Bharat.”
Ravanan N, CEO, Oneindia
“The Finance Minister’s announcement of a full review of the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, in the Union Budget this year, is an important step toward modernizing India’s foreign investment framework. A more agile and predictable approach to foreign capital can help remove funding bottlenecks, enable Indian companies to raise equity faster, and strengthen long-term engagement with global investors. For digital media platforms operating at the intersection of content, commerce, and data, access to capital is critical for building cloud infrastructure, AI-led systems, and scalable technology capabilities. If this review leads to simpler investment pathways while maintaining strong domestic governance, it can meaningfully support sustainable growth across India’s emerging digital ecosystems.”
Dilip Modi, Founder & CEO, Spice Money
“Budget 2026 clearly articulates the government’s kartavya to ensure that every family, community, and sector has access to resources and opportunities for meaningful participation in India’s growth story. The focus on scaling manufacturing, rejuvenating legacy industrial clusters, creating champion MSMEs through a INR10,000 crore fund, and strengthening banking and NBFC frameworks reinforces the central role of small enterprises in employment generation and local economic resilience.
“MSMEs provide livelihoods to millions across rural and semi-urban India, and initiatives such as mandating TReDS for CPSU purchases, improving credit flow, and reviewing the banking system for Viksit Bharat will directly strengthen their financial sustainability. The proposed Bharat Vistar platform and the broader emphasis on technology-led productivity also signal a clear intent to ensure that growth reaches farmers, micro-entrepreneurs, and underserved communities.
“For last-mile fintech platforms, this budget creates a strong enabling environment to translate policy intent into on-ground outcomes by delivering credit, payments, and essential financial services to Bharat’s smallest businesses and households, ensuring that inclusion remains at the heart of India’s economic transformation.”
Dr Pawan Goenka, Chairman, IN-SPACe (Indian National Space Promotion and Authorization Centre) and SCALE Committee
“The Union Budget 2026 continues to strengthen the foundations required for sustained economic growth. With wide-ranging reforms across sectors, the focus on manufacturing with a boost to creating Champion MSMEs, and infrastructure reflects an understanding that scale and resilience are built through stable policy and institutional support. Simplification of tax processes, decriminalisation of compliance-related provisions, and GST rationalisation will ease adherence, improve predictability for businesses, and encourage entrepreneurship. The proposal to establish dedicated Rare Earth Corridors across mineral-rich states is a timely step towards securing critical materials, strengthening domestic value chains, and reducing strategic dependencies. At the same time, targeted customs duty exemptions to support domestic manufacturing and supply-chain integration will further contribute to a more competitive, resilient economy where businesses can invest with confidence and plan for the long term.”
Pratap Mane, President & Country Head, Colt DCS
“The Union Budget 2026-27 marks a pivotal moment in accelerating India’s digital infrastructure ambitions. The extension of the tax holiday to 2047 for foreign cloud providers leveraging Indian data centre capacity is a bold, investor-attractive policy that stands out globally for its long-term horizon. This provides the fiscal predictability essential for committing to large-scale, capital-intensive developments, directly supporting our ongoing expansion and efforts to deliver more than 250 MW of AI-ready Data Centre for our Hyperscale Clients in India.
“The 15% safe harbour for related-party data centre services further streamlines operations for international players building in India, reducing complexity and enhancing cost efficiency in a high-growth environment. We see this as a clear catalyst for India’s rise as a preferred global hub, enabling operators like Colt DCS to scale sustainably and deliver the trusted, customer-centric infrastructure that global hyperscalers demand.”
Snehkumar Purohit, Chief Strategist, EVM India
Most MSMEs struggle because cash cycles are tight and balance sheets are stretched. Too much debt leaves little room to absorb shocks or invest in growth. The ?10,000 crore MSME Growth Fund finally recognises this gap by bringing equity into the picture. The ?2,000 crore addition to the Self-Reliant India Fund supports businesses that are ready to scale, not just start. This helps MSMEs move from managing liabilities to building capability. This addresses a real structural constraint on the ground.
Ravi Mittal, Founder & CEO, QuackQuack & Rebounce
“The Budget’s strong push towards decentralising India’s startup ecosystem is both timely and transformative. As a platform witnessing massive growth from non-metro India, we welcome the scaled-up GENESIS programme and the expanded Fund of Funds. This directly addresses the biggest hurdle for founders outside the big metros: Access to Capital.
“For a digital-first business, the Ease of Doing Business is just as important as funding. The Budget’s focus on simplifying compliance for digital startups and the continued investment in Digital Public Infrastructure (DPI) will be the real catalyst. It lowers the barrier to entry, allowing entrepreneurs in Tier 2 and Tier 3 cities to focus on building a product rather than paperwork. This essentially bridges the gap between India and Bharat, ensuring that the next wave of tech innovation is inclusive, widespread, and grassroots-led.”
Adeeb Jamal, Founder, ARAF
“As a founder building from a Tier 2 city ( Jamshedpur ), I see Budget 2026 as a decisive turning point in India’s startup narrative. The expansion of GENESIS, alongside reinforced Fund of Funds and Seed Fund schemes, directly addresses the challenges founders face outside metro ecosystems, access to patient capital, quality mentorship, and infrastructure. The focus on first-time entrepreneurs, women, and SC/ST founders signals a genuine intent to democratise entrepreneurship. Measures like enhanced credit guarantees, extended tax holidays, and innovation universities significantly reduce early-stage risk and create the cash-flow visibility needed to scale. These steps lay the foundation for a more inclusive, resilient, and deeptech-driven startup ecosystem where innovation is no longer limited by geography.”
Navneet Munot, MD & CEO, HDFC AMC LTD.
“Amidst heightened geopolitical volatility, the Union Budget offers a reassuring sense of direction, continuity and policy credibility. The glide path towards a lower debt-to-GDP ratio, alongside sustained emphasis on infrastructure creation—digital, physical and social—augur well for preserving India’s growth momentum over the medium to long term. Continued simplification of the tax architecture strengthens the investment climate by enhancing transparency and predictability.
“The revision in the buyback tax framework enables corporates to return surplus capital more efficiently. Equally noteworthy is that “Reforms Train” keeps chugging along instead of halting at merely one station i.e. Budget day.
“With the event now behind us, market attention will shift to incremental macroeconomic cues, corporate earnings and flow dynamics. From a long-term investor perspective, policy consistency, prudence in numbers and persistence in reforms remain the important anchors for value creation.”
Lakshmi Venkataraman Venkatesan, Founding and Managing Trustee, Bharatiya Yuva Shakti Trust
“Given the Macro environment, the current budget is good with 7 % growth, considering 2 % inflation as well. Infrastructure, being one of the main focus areas is a positive sign, in the context of the country’s Make In India agenda and pressing needs of the country. The 2026 Union Budget is a genuine attempt to make it inclusive and schemes focusing on the MSME sector, Yuva Shakti and women enterprises are very welcome. Credit schemes for MSMEs are a welcome move and the INR 10,000 cr growth fund with INR 2000 cr top up to the self-reliant fund will give the necessary impetus the sector needs. Having said that, the massive addressable credit gap of approximately INR30 lakh crore in India’s MSME sector, according to the latest SIDBI report has been quite worrisome. The average loan size needs to go up INR 67000.
“Special focus has been given to mass employment creating sectors. Mahatma Gandhi Gramya swaraj Yojana for handloom and handicrafts, the fast growing tourism sector and textile expansion schemes will help deliver this. As we eagerly await the recommendations from the high-powered Education to Employment and Enterprise Committee, the strong emphasis on skill development, announcing new short-term modular courses with professional bodies, expansion of AI-driven skilling initiatives, and youth-focused programs to boost employability and entrepreneurship, this budget is aptly dubbed a “yuva shakti–driven budget”. Skills must and will continue to remain a central pillar for India’s growth. Five university townships created near major industrial and logistics corridors will provide the much required talent India Inc and the MSME sector needs.
“SHE Marts for women to scale enterprises is an imperative, as ~85% of them don’t have access to loans, considering most micro loans of 67K go to women. Mentoring and handholding for MSMEs in Tier 2 & 3 cities through “Corporate Mitras Cadre”, especially to guide them on compliance will not only help them reduce costs but also save their time, making them more efficient and productive, thereby improving ease of doing business significantly.
