Budget 2026: FM Nirmala Sitharaman Launches ₹10,000 Crore Growth Fund to Strengthen MSME Sector

New Delhi | 01 February,2026 In a major boost to India’s Micro, Small, and Medium Enterprises (MSME), Finance Minister Nirmala Sitharaman announced a ₹10,000 crore growth fund in the Union Budget 2026–27. Speaking in Parliament, she said, “I propose to revive 200 legacy industrial clusters… introduce a ₹10,000cr SME Growth Fund… and top up the Self‑Reliant India Fund by ₹2,000cr to support micro enterprises.” This initiative aims to strengthen the MSME sector against global challenges, including trade tariffs, and enhance its contribution to manufacturing and exports. The MSME sector has been a key driver of employment and economic growth, with over 5.9 crore registered units generating jobs for more than 25 crore people. In previous budget proposals, Sitharaman highlighted MSMEs as the “Second Engine” for growth, providing credit access, classification reforms, and support for inclusive entrepreneurship. She had also doubled credit guarantee cover for micro and small enterprises, enabling additional loans worth ₹1.5 lakh crore over five years. The new growth fund is designed to further support industrial clusters and startups, while continuing previous initiatives such as the Fund of Funds for startups, term loans for first-time women, Scheduled Caste, and Scheduled Tribe entrepreneurs, and schemes like PM Vishwakarma, PMEGP, SFURTI, and MSES. These measures aim to boost productivity, encourage technological adoption, and protect the sector from global headwinds. Over the past few years, MSMEs have steadily increased their contribution to India’s economy, rising from 27.3% of Gross Value Added (GVA) in 2020-21 to 30.1% in 2022-23. With the new ₹10,000 crore fund, the government aims to strengthen this vital sector, ensuring that small and medium enterprises continue to play a central role in employment generation, exports, and the country’s economic growth. Budget 2026: ₹10,000 Crore MSME Growth Fund Announced to Boost Small Businesses Finance Minister Nirmala Sitharaman on Sunday announced a ₹10,000 crore growth fund for the Micro, Small, and Medium Enterprises (MSME) sector in the Union Budget 2026–27. She said, “I propose to revive 200 legacy industrial clusters… introduce a ₹10,000cr SME Growth Fund… and top up the Self‑Reliant India Fund by ₹2,000cr to support micro enterprises.” The fund aims to protect MSMEs from global challenges like tariffs and strengthen their role in jobs, manufacturing, and exports. MSMEs already play a major role in India’s economy, with over 5.9 crore registered units providing employment to more than 25 crore people. In previous budgets, Sitharaman called them the “Second Engine” of growth and introduced credit reforms, easier classification, and support for startups and first-time entrepreneurs from women, SC, and ST communities. The new fund will also revive industrial clusters and support startups, building on earlier schemes such as PM Vishwakarma, PMEGP, SFURTI, and MSES. These measures aim to improve productivity, encourage technology adoption, and help MSMEs grow even during global challenges. MSMEs have steadily increased their contribution to India’s economy, rising from 27.3% of GVA in 2020-21 to 30.1% in 2022-23. With the new ₹10,000 crore fund, the government hopes to give small businesses the push they need to thrive and create more jobs across the country.