The Federation of Associations of Cottage and Small Industries (FACSI) has urged the Centre for tax, credit and regulatory relief measures for micro and small enterprises in the 2026-27 Union Budget, to sustain growth and strengthen their role in the industrial ecosystem.
In a recent pre-budget letter to Finance Minister Nirmala Sitharaman, FACSI president H K Guha said the recommendations were framed after consultations with various associations of entrepreneurs and MSE groups across the country.
Among the key demands, the industry body has sought the constitution of an exclusive council for small and micro enterprises under the Ministry of MSME, a higher exemption threshold under the GST regime and a single, simplified GST return for small units.
1 January 2026
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FACSI has also called for statutory collateral-free lending of up to Rs 1 crore for MSEs at an interest cap of 6-7 per cent, along with interest subvention during periods of financial stress, and automatic renewal of working capital limits for units complying with banking norms.
Highlighting liquidity concerns, the federation demanded GST refunds within 15 days, with statutory interest for delays by the government, and complete decriminalisation of procedural lapses related to GST returns, labour and local laws.
For export-oriented units, FACSI proposed the creation of an Export Risk Equalisation Fund to compensate small exporters affected by sudden tariff hikes, besides enhancement of lending targets for MSEs by SIDBI and public sector banks.
The letter also sought reduction in fees for MSEs submitting tenders through the GeM portal, and stronger functioning of State Facilitation Councils to expedite cases of delayed payments, noting that certain issues would require amendments to the MSMED Act, 2006.
FACSI also emphasised the need for closer coordination with state governments to extend subsidies on renewable energy installations, electricity charges and local levies, and to provide special facilities for units located in industrial estates run by state development corporations.
“These measures will be a significant enabler for the growth of MSEs in India,” Guha said.
