Union Budget 2026: FM Sitharaman announces Rs 10,000 cr fund for SMEs, top-up of MSME fund with Rs 2,000 cr

Union Budget 2026: Finance Minister Nirmala Sitharaman proposed the setting up of a Rs 10,000-crore fund for small and medium enterprises (SMEs) in order to boost the economy. The finance minister’s announcement came during the presentation of her ninth Union Budget. 

Separately, the finance minister also announced that the Self-Reliant India Fund will be topped up with another Rs 2,000 crore in 2026-27 to support micro, small and medium enterprises (MSMEs). Initially, the fund was announced with an outlay of Rs 50,000 crore in 2023 in equity funding. 

The government will also develop a cadre of 'corporate mitras' in Tier 2 and 3 cities to help MSMEs. The 'corporate mitras' will help MSMEs meet their compliance requirements at affordable costs. The government will also set up an 'Education to Employment and Enterprise' Standing Committee to recommend measures focusing on the services sector.

The minister introduced several measures targeting the manufacturing and textile sectors in the Union Budget 2026. The FM proposed the establishment of mega textile parks with an emphasis on value addition in technical textiles and an integrated textile programme comprising five sub-parts. 

The proposals also include the revival of 200 legacy industrial clusters and the Mahatma Gandhi Gram Swaraj initiative designed to strengthen the Khadi handloom sector.

Sitharaman also announced that TReDS (Receivables Exchange of India Ltd, RXIL) – a joint venture promoted by SIDBI and NSE – will facilitate all purchases from MSMEs by central public sector enterprises. 

The government also plans to continue developing infrastructure in Tier 2 and Tier 3 cities, she said. The budget furthermore details the introduction of a Natural Fibre Scheme, Textile Expansion and Employment Scheme, and a National Handloom and Handicraft programme, which could provide support to the sector amid challenges such as steep 50 per cent tariffs imposed by the US.

The finance minister said India has the potential to emerge as a global hub for high-quality affordable sports goods. The focus on integrated programmes and new schemes is intended to enhance sectoral competitiveness and encourage innovation in Indian manufacturing and exports.