Finance Minister proposes dedicated SME growth fund worth Rs 10,000 cr, integrated programme for textile sector

NEW DELHI: Finance Minister Niramala Sitharaman has proposed to introduce a dedicated Rs 10,000 crore SME growth fund to create future jobs, incentivising enterprises based on select criteria. She stated that the government recognises MSMEs as a vital engine of growth, and proposes a three-pronged approach to help them grow as champions. Equity support.

“I propose to introduce a dedicated Rs 10,000 crore SME growth fund to create future champions, incentivising enterprises based on select criteria. I also propose to top up the self-reliant India fund set up in 2021 with Rs 2,000 crore to continue support to micro-enterprises and maintain their access to risk capital,” she said. More than Rs 7 lakh crore has been made available to MSMEs through liquidity support.

Watch Live: Smt @nsitharaman presents Union Budget 2026–27 in Parliament #ViksitBharatBudget @sansad_tv @PIB_India https://t.co/DieMezvgTp

— Nirmala Sitharaman Office (@nsitharamanoffc) February 1, 2026

“To leverage its full potential, I propose four measures. One: mandate TREDS as the transaction settlement platform for all purchases from MSMEs by CPSEs. Survey as a benchmark for other corporates. Two: introduce a credit guarantee support mechanism through CGT-MSC for invoice discounting on the TREDS platform. Three: link GEN with TREDS for sharing information with financiers about government purchases from SMEs, encouraging cheaper and quicker financing. Four: Introduce TREDS receivables as asset-backed securities, helping develop a secondary market, enhancing liquidity and settlement of transactions,” the minister said.

Sitharaman also noted that the government shall continue to focus on developing infrastructure in cities with over 5 lakh population, that is, Tier II and Tier III cities, which are expanded to become growth centres.

Public capital expenditure has increased manifold from Rs 2 lakh crore in 2014-15 to an allocation of Rs 11.2 lakh crore. In this coming year, that is, this financial year 2026-27, I propose to increase it to Rs 12.2 lakh crore to continue the momentum.

For the labour-intensive textile sector, the Finance Minister proposed an integrated programme with key components. The minister emphasised that the first pillar of her plan, the National Fibre Scheme, aims to “achieve self-reliance in natural fibres like silk, wool, and jute, as well as man-made and new industrial-age fibres”.

The second is the Textile Expansion and Employment Scheme, which seeks to modernise traditional clusters by providing capital support for machinery, technology upgrades, and common testing and certification centres.

The third component is the National Handloom and Handicraft Programme (NHHP), designed to integrate and strengthen existing schemes while ensuring targeted support for weavers and artisans.

With the introduction of Samarth 2.0, the government aims to align the workforce with future demands. To promote globally competent and sustainable textiles and apparel, Sitharaman said, “Samarth 2.0 is to modernise and upgrade the textile skilling ecosystem through collaboration with industry and academic institutions,” ensuring that the next generation of workers is as tech-savvy as they are skilled.

Closing her remarks on the sector, the Finance Minister turned to large-scale infrastructure as the ultimate solution to improve efficiency. She envisioned a future in which production and value addition occur under one roof, reducing logistics costs and boosting exports.

To achieve this, she told the assembly, “I propose to set up a mega textile park,” further clarifying that “they can also focus on bringing value addition to technical textiles.” This strategic focus on technical textiles — used in everything from healthcare to automotive industries — suggests a shift toward high-value manufacturing that could redefine India’s role in the global market.

Finance Minister Sitharaman presented her record ninth consecutive Union budget today in the Parliament. On Thursday, Union Finance Minister Nirmala Sitharaman tabled the Economic Survey of India in Parliament for the financial year 2025-26.

The tabling of the Economic Survey ahead of the Budget follows the long-standing tradition of outlining the state of the economy before detailing future fiscal plans. The document provided a comprehensive, data-backed review of the economy’s performance over the previous year and offers a broad roadmap for future policy direction. As the government’s flagship annual report, it reviews key economic developments over the past 12 months.

India’s real GDP growth for 2026-27 is projected in the range of 6.8-7.2 per cent, reflecting sustained medium-term growth capacity amid a challenging global environment.

India recorded the lowest inflation rate since the beginning of the CPI series, with April-December 2025 average headline inflation coming in at 1.7 per cent, attributing to general disinflationary trend in food and fuel prices. Looking ahead, the inflation outlook remains benign, supported by favourable supply side conditions and the gradual pass-through of GST rate rationalisation. (ANI)