Nirmala Sitharaman announces Rs 10,000-crore SME growth fund, TREDS reforms in Budget 2026

Finance Minister Nirmala Sitharaman on February 1 announced a three-pronged strategy to strengthen micro, small and medium enterprises (MSMEs), unveiling a Rs 10,000-crore SME Growth Fund, a Rs 2,000-crore top-up for the Self-Reliant India Fund and sweeping measures to ease liquidity and credit access. Presenting the Budget 2026, Sitharaman said the government would provide equity support to create “SME champions”, reduce working capital stress and improve payment discipline in MSME transactions. The proposed Rs 10,000-crore SME Growth Fund will offer equity support to high-potential enterprises, incentivising MSMEs based on select performance criteria to help them scale up and expand. Follow our live blog for the latest on Budget 2026 The minister also announced a Rs 2,000-crore infusion into the Self-Reliant India Fund, strengthening the fund-of-funds mechanism that supports MSMEs through equity participation. To address liquidity concerns, Sitharaman said the Trade Receivables Discounting System (TREDS) will be used as a pricing benchmark for MSMEs, and will be made mandatory for all Central Public Sector Enterprises (CPSEs) for transactions with MSMEs, a move aimed at ensuring faster payments. The Budget also proposes easier credit access for MSMEs and professional support through a dedicated cadre of “Corporate Mitras”, who will assist enterprises in compliance, governance and growth planning. The announcements come amid continued concerns over delayed payments, high borrowing costs and limited equity access faced by India’s MSME sector, which accounts for a significant share of employment and exports.