As the Union Budget 2026 approaches, industry bodies have flagged key expectations focused on easing pressure on micro, small and medium enterprises (MSMEs) and strengthening the startup ecosystem amid funding constraints and regulatory challenges.
With employment generation and entrepreneurship high on the policy agenda, stakeholders are looking for targeted measures that address cash-flow stress, compliance hurdles and long-term sustainability.
MSMEs: focus on liquidity, costs and exports
The Associated Chambers of Commerce and Industry of India (ASSOCHAM) said MSME growth is crucial for driving jobs and exports, urging strict enforcement of payment timelines and faster GST and RoDTEP refunds to ease working capital stress.
It also called for time-bound support for sectors hit by tariff shocks, including textiles, gems and jewellery, and seafood.
To reduce operating costs, ASSOCHAM sought expanded incentives for distributed renewable energy adoption by MSMEs.
The industry body also pitched for wider cash-flow–based lending through digital infrastructure and Account Aggregators, targeted credit enhancement for NBFCs lending to MSMEs to lower borrowing costs, and simplified customs procedures and improved logistics to promote cross-border e-commerce exports.
Startups: Governance reforms and easier compliance
The Confederation of Indian Industry (CII) said recent corporate governance challenges faced by some Indian startups underline the need for stronger oversight mechanisms.
It recommended encouraging independent oversight, strengthening shareholder protection and promoting transparency to ensure ethical and responsible management focused on long-term success.
To strengthen the policy ecosystem, CII suggested allowing startups to maintain accounts in non-INR currencies to support global expansion.
It also called for easing compliance by reducing approvals, simplifying licences and permits, and making it easier to comply with labour and taxation laws.
Broader policy context ahead of Budget Day
These expectations mirror concerns raised by founders across sectors. Startups continue to face limited access to credit, rigid compliance norms and taxation hurdles despite multiple government schemes.
From a macro perspective, Punjab National Bank MD and CEO Ashok Chandra said MSMEs are likely to remain a key focus area in the Union Budget 2026, alongside rural infrastructure and capex-led growth, as per news agency ANI, noting that such priorities help infuse new entrepreneurs and attract capital.
As Budget Day nears, industry bodies and entrepreneurs remain hopeful that targeted interventions for MSMEs and startups will help stabilise cash flows, reduce regulatory friction and support sustainable growth.
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