MSME Times Special | Budget Watch
MSMEs Present United Reform Agenda Ahead of Budget
Bharat’s MSME ecosystem has come together with a consolidated set of policy recommendations ahead of the Union Budget 2026–27. Inputs have been gathered from thousands of entrepreneurs, exporters’ forums, and industry bodies including FICCI and CII, spanning over 20 states.
The demands are rooted in ground realities—GST compliance costs consuming 20–30% of revenues, and credit constraints blocking nearly 40% of viable expansion plans. Industry leaders stress the need for structural reforms over short-term incentives, aiming to raise MSME contribution to 50% of GDP by 2030. Regional priorities differ sharply, with textile hubs seeking duty refunds, electronics clusters pushing for PLI extensions, and agro-based MSMEs demanding cold-chain support.
Tax Simplification and Compliance Relief Top the List
A simplified GST framework remains the sector’s primary demand. MSMEs are seeking turnover-based GST exemptions up to ₹2 crore, faster input tax credit settlements, and mandatory 45-day payment enforcement with penalties on large buyers.
Inverted duty structures continue to inflate costs by 15–20% in sectors like textiles and chemicals. Industry groups have called for litigation-free input tax credit mechanisms and phased digitisation, warning that aggressive mandates could alienate nearly 70% of informal enterprises. Proposals also include raising presumptive taxation limits to ₹3 crore and exempting firms below ₹10 crore turnover from e-invoicing, potentially saving 15–20 man-hours per unit each month.
Credit Flow, Technology Upgradation and Export Push
Stakeholders have recommended a ₹50,000 crore dedicated MSME technology fund to support AI, IoT, automation, and green transitions. On the financing side, they are seeking collateral-free loans up to ₹10 crore under ECLGS 3.0 and expanded interest subvention for exporters.
Priority sector recognition for investments in EVs, agritech, and pharmaceuticals has also been proposed. Greater convergence with NITI Aayog and PLI 2.0 could unlock ₹1 lakh crore in combined impact, helping MSMEs integrate deeper into global supply chains. Export clusters in Gujarat and Tamil Nadu are pushing for enhanced RoDTEP support to offset US tariff pressures and target 20% shipment growth.
SMEStreet’s Budget Coverage Plan
SMEStreet will provide end-to-end coverage of the Union Budget 2026–27, featuring live entrepreneur panels across regions, sector-wise deep dives, and post-Budget impact audits. The platform will track implementation against announcements, publish MSME toolkits for scheme access, and host interactive sessions with policymakers to ensure continuous industry feedback through 2026.
