Budget 2026: ₹10,000 Crore SME Growth Fund Announced to Boost MSMEs and Credit Access

Finance Minister Nirmala Sitharaman had announced a fresh allocation of ₹10,000 crore to the small and medium enterprises (SMEs) growth fund in the Budget speech on Sunday (February 1, 2026), in a bid to give fresh incentives to lakhs of small businesses and enterprises in the country.

The fund would apparently provide a much-needed boost in giving a new lease of life to Micro, Small, and Medium Enterprises (MSMEs). Moreover, the fund would enable entrepreneurs to access funds in a tight credit pipeline.

Finance Minister Sitharaman, presenting her ninth budget in Parliament, said a ₹10,000 crore SME growth fund will be set up to support the growth of potential firms in the country. The allocation will help clusters of businesses to make a potential comeback. This would be a fresh impetus to companies that have weakened due to credit stress and outdated technology.

Ms. Sitharaman proposed reviving 200 legacy industrial clusters through infrastructure upgradation and technology enhancement. Her speech also marked a scheme for container manufacturing to keep up with the pace of the global infrastructure ecosystem

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For such a purpose, the Union Government would introduce a ‘Self-Reliant Fund’, which will see an initial top-up of ₹4,000 crores. The move, expected to provide a fresh impetus to the trade finance chain, would support lakhs of micro enterprises in the country, which find it difficult to sustain due to a lack of guaranteed credit schemes. The fund will operate alongside incentive frameworks that reward SMEs meeting select criteria such as productivity, formalisation and export readiness.

Ms. Sitharaman said the Union Government has already made more than ₹7 lakh crore available through the Trade Receivables Discounting System (TReDS). The new measures would mandate TReDS as the one-step platform for MSME purchases by central public sector enterprises. Alongside, introducing a credit guarantee scheme support and linking the Government e-Marketplace (GeM) with TReDS for faster financing. The steps are poised to see the development of secondary market and enhance liquidity transactions.