Industry Lauds ₹10,000 Cr MSME Funds to Create 'Champions' in Budget

Finance Minister Nirmala Sitharaman while presenting Union Budget in the parliament on February 1 proposed to set up a dedicated ₹10,000-crore growth fund for micro, small and medium enterprises (MSMEs) to create future champions, incentivising enterprises based on select criteria.

In addition a Self-Reliant India Fund will also be allocated with additional ₹2,000 crore to support MSMEs and maintain access their access to risk capital.

The government plans to launch a scheme to revive 200 legacy industrial clusters, targeting traditional hubs that have thinned out due to credit stress and outdated technology improve their cost competitiveness and efficiency through infrastructure and technology upgradation.

FM Sitharaman also underscored that over ₹7 lakh crore has been made available to MSMEs through Trade Receivables Electronic Discounting System (TReDS), an RBI-regulated digital platform to auction their trade receivables (invoices) to financiers for instant liquidity. She proposed four measures to leverage its full potential, mandating TReDS as the transaction settlement platform for all purchases from MSMSEs by CPSEs, introducing a credit guarantee support mechanism through CGTMSE for invoice discounting, linking GeM with TReDS for sharing information with financiers about government purchases from MSMEs, encouraging cheaper and quicker financing. Another measure includes enabling TReDS receivables as asset-backed securities to develop a secondary market, enhancing liquidity and transaction settlement.

Industry Experts Laud MSME Push

Speaking about the encouragement that MSMEs could get with the help of the announced measures, Ankur Jain, Managing Director, Ankur Scientific, said, “It is encouraging to see measures aimed at championing MSMEs, strengthening domestic manufacturing and promoting clean energy R&D, as these are vital for advancing indigenous technology development and building long-term capabilities.”

Commending the favourable announcements, Yuvraj Bhardwaj, Co-founder and CEO, Petonic AI, said that the Budget’s strong focus on MSMEs is a timely and future-ready step towards building a more resilient business ecosystem. “The ₹10,000 crore growth fund and enhanced risk capital will encourage entrepreneurship and job creation, while reforms around TReDS, Government e-Marketplace (GeM) integration and credit guarantees will significantly ease liquidity challenges for small businesses,” said Bharadwaj.

 He further said that the emphasis on development of a cadre of ‘Corporate Mitras’, especially in Tier-2 and Tier-3 cities with the help of short-term, modular courses and practical tool provided by professional institutions such as ICAI, ICSI and ICMAI, along with other measures will assist MSMEs adopt technology faster and scale sustainably while instilling greater confidence.

Echoing a similar perspective, Archana Jahagirdar, Founder & Managing Partner of Rukam Capital, added that liquidity measures-such as invoicing platforms, credit guarantees and "Corporate Mitras" for compliance support- further catalyse the ecosystem.

She underscored that initiatives like equity support through a dedicated ₹10,000 crore fund for future MSME ‘Champions’, plus a ₹2,000 crore top-up to the Self-Reliant India Fund, empower entrepreneurs to invest in R&D and scale innovative products and services.

“In essence, by nurturing MSMEs, India is laying a robust foundation for inclusive, sustainable development. This strategic push will unlock entrepreneurial potential nationwide, propelling us toward government's Viksit Bharat 2047 vision,” she concluded.