The Union Budget 2026-27 continues India’s push to empower MSMEs (Micro, Small, and Medium Enterprises), providing substantial equity support to turn high-potential small businesses into national and international “Champions.” Central to this initiative is the Self Reliant India (SRI) Fund, alongside the proposed expansion of the MSME Champions Scheme, reflecting the government’s commitment to fostering innovation, global competitiveness, and sustainable growth.
The Self Reliant India (SRI) Fund
The ₹10,000 crore Mother Fund under the SRI initiative acts as a “Fund of Funds,” designed to bridge the equity gap for MSMEs with growth potential. Coupled with ₹40,000 crore from private equity and venture capital funds (Daughter Funds), the total fund corpus aims to mobilize ₹50,000 crore for MSMEs.
-
Achievements: As of November 30, 2025, the fund has deployed ₹15,442 crore in equity support to 682 MSMEs, up from ₹10,979 crore invested in 577 firms in March 2025.
-
Management: NSIC Venture Capital Fund Limited (NVCFL), registered as a SEBI Category II AIF, operates the fund.
-
Eligibility: MSMEs with high growth potential, capable of scaling nationally or globally, are prioritized.
This fund not only provides capital infusion without increasing debt obligations but also encourages MSMEs to explore public listings and attract strategic investments, thereby boosting their long-term competitiveness.
MSME Champions Scheme Expansion
To complement the SRI Fund, the government is considering a ninefold expansion of the MSME Champions Scheme, targeting ₹8,000–10,000 crore over the next five years (FY27–FY31). The expanded scheme focuses on three pillars:
-
MSME-Sustainable (ZED): Promoting green and cleaner manufacturing practices.
-
MSME-Innovative: Supporting incubation, IPR, and design development.
-
MSME-Competitive (Lean): Strengthening productivity and operational efficiency.
The proposal is currently at the Expenditure Finance Committee (EFC) stage, signaling imminent implementation in the coming fiscal years.
2025-26 Policy Updates
Recent measures further strengthen the MSME ecosystem:
-
CGTMSE Enhancement: The Credit Guarantee Scheme saw a ₹9,000 crore infusion, with the guarantee ceiling raised to ₹10 crore.
-
Udyam Assist Platform (UAP): Formalizes informal micro-enterprises, enabling them to access funding and government schemes.
-
Revised MSME Classification: Expanded turnover and investment limits allow more businesses to benefit from these initiatives.
Strategic Objectives
The combined focus of the SRI Fund and MSME Champions Scheme is to:
-
Reduce debt dependence by providing growth capital.
-
Promote listing on stock exchanges for high-potential MSMEs.
-
Boost global competitiveness through modern technology adoption, IPR support, and cleaner manufacturing processes.
Regional Impact
States leading these investments include Karnataka, Maharashtra, and Delhi, highlighting regions with thriving entrepreneurial ecosystems.
With the Union Budget 2026-27, the government is sending a strong signal that MSMEs are at the heart of India’s growth story, positioning them as engines of innovation, employment, and economic resilience.