Industry Bodies Outline MSME and Startup Expectations Ahead of Union Budget 2026
As the Union Budget 2026 approaches, industry organizations have highlighted critical expectations centered on alleviating pressure on micro, small, and medium enterprises (MSMEs) and strengthening the startup ecosystem. These demands come amid ongoing funding constraints and regulatory challenges that have impacted business operations across India.
With employment generation and entrepreneurship remaining high on the policy agenda, stakeholders are advocating for targeted measures that address cash-flow stress, compliance hurdles, and long-term sustainability for businesses.
MSMEs: Focus on Liquidity, Costs, and Exports
The Associated Chambers of Commerce and Industry of India (ASSOCHAM) emphasized that MSME growth is essential for driving job creation and boosting exports. The industry body has urged strict enforcement of payment timelines and faster processing of GST and RoDTEP refunds to ease working capital stress for small businesses.
ASSOCHAM also called for time-bound support for sectors affected by tariff shocks, including textiles, gems and jewellery, and seafood industries. To reduce operating costs, the organization sought expanded incentives for distributed renewable energy adoption by MSMEs.
Additional recommendations from ASSOCHAM include:
- Wider implementation of cash-flow-based lending through digital infrastructure and Account Aggregators
- Targeted credit enhancement for NBFCs lending to MSMEs to lower borrowing costs
- 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) pointed to recent corporate governance challenges faced by some Indian startups as evidence of the need for stronger oversight mechanisms. The industry body 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 for startups, CII suggested allowing startups to maintain accounts in non-INR currencies to support global expansion efforts. The organization also called for easing compliance burdens by:
- Reducing approval requirements
- Simplifying licenses and permits
- Making it easier to comply with labor and taxation laws
Broader Policy Context Ahead of Budget Day
These expectations reflect concerns raised by founders across various sectors. Startups continue to face limited access to credit, rigid compliance norms, and taxation hurdles despite multiple government schemes designed to support them.
From a macroeconomic perspective, Punjab National Bank MD and CEO Ashok Chandra noted that MSMEs are likely to remain a key focus area in the Union Budget 2026, alongside rural infrastructure and capex-led growth. According to news agency ANI, such priorities help infuse new entrepreneurs and attract capital to the sector.
As Budget Day approaches, industry bodies and entrepreneurs remain hopeful that targeted interventions for MSMEs and startups will help stabilize cash flows, reduce regulatory friction, and support sustainable economic growth across India.
