Union Budget 2026–27: Industry Speaks, MSMEs React — SMEStreet’s Live Budget Pulse

As India’s Finance Minister rises to present the Union Budget 2026–27, the nation’s economic stakeholders—entrepreneurs, MSME founders, CXOs, investors, bankers, exporters, and policymakers—turn their attention to one defining question: How will this Budget shape the next phase of India’s growth story?

At SMEStreet, India’s most credible MSME-focused business news and analysis platform, we are launching a comprehensive, industry-wide LIVE Budget Reaction Story to capture the first, most authentic responses from the business ecosystem—as the Budget unfolds.

This evolving story will bring together insightful quotes, sharp assessments, sector-specific expectations, and forward-looking perspectives from leaders across manufacturing, exports, fintech, banking, technology, healthcare, logistics, energy, startups, and the broader MSME value chain. From credit access and taxation to infrastructure push, skilling, exports, digitalisation, and ease of doing business—this live coverage aims to decode what truly matters for India’s enterprises on the ground.

Unlike conventional post-Budget summaries, SMEStreet’s live reaction coverage will focus on practical implications, execution readiness, and real-world impact, especially from the MSME lens. The objective is simple yet powerful: to create a collective industry voice that reflects aspirations, concerns, and confidence in India’s economic direction.

Call to Action: Industry Leaders, Your Voice Matters

SMEStreet invites industry leaders, founders, CEOs, policymakers, bankers, investors, and sector experts to be an active part of this high-impact editorial initiative. If you have a Budget reaction, sectoral insight, expectation, concern, or strategic viewpoint, we encourage you to share your perspective and contribute to this evolving narrative.

Click Here to Participate

Selected quotes and expert views will be featured in SMEStreet’s live Budget story, with attribution, ensuring wide visibility among decision-makers, MSME owners, and policy influencers across India and global markets.

As the Budget sets the tone for India’s economic future, SMEStreet remains committed to amplifying informed industry voices and translating policy into perspective. Stay with us for real-time reactions, sharp analysis, and meaningful conversations that matter to India’s MSMEs.

Feb 03, 2026 13:15 IST
Budget 2026-27 Maintains Momentum of Structural Reforms: Yes Bank's CEO #BudgetWithSMEStreet
Quotes from Mr. Prashant Kumar, Managing Director & CEO, YES BANK 
“This Budget needs to be seen in connection to the previous few year’s Budgets, especially with it comes to the FM carefully managing the near-term objectives with longer term goals. While the hopes of a bumper resource generation year were limited with the growth in FY27 pragmatically assumed at 10%, the FM achieved the objectives of reducing both the public debt and the fiscal deficits as % of GDP, thereby sticking to the roadmap of fiscal consolidation. Achieving the fiscal targets are also commendable after taking into consideration a higher resource sharing with the State Governments, as suggested by the 16^th Finance Commission.  
The long-term strategy of the budget remained focused on harnessing the demographic dividends and achieve the true potential of the economy. The Budget maintained the momentum of structural reforms with a forward-looking approach, build a financial sector that was robust and resilient and use technology, including AI, to achieve productivity. A boost to the semi-conductor sector and electronics manufacturing along with strategies to establish dedicated Rare Earth Corridors, clearly establishes the intention towards not only making the Indian economy self-reliant, but also ring fence the economy from global unrests that tend to disturb the supply chain ecosystem. The short-term challenges, specifically the strains at the labor-intensive sectors due to the US tariffs have also been addressed and seeks to promote globally competitive and sustainable textiles and apparels through capital support for machinery and technological upgradation of traditional clusters. Building on last year’s MSME-focused measures, this budget announced an equity support to the SMEs via a dedicated Rs. 10,000 crore SME Growth Fund alongside other measures to strengthen the sector.
A big move was to bring back the services sector into focus. Consequently, safe harbour rules for the IT sector were amended and the threshold for availing safe harbor was enhanced. Recognizing the sharp growth of data centres across the world and to attract global investments in this area into India, a tax holiday was provided to the sector till 2047 to foreign companies that provides cloud services to customers globally by using data centre services from India.”



Feb 03, 2026 13:10 IST
This Budget Focused on Domestic Manufacturing Push and Supply Chain Resillience
Mr. Sudhanshu Vats, MD, Pidilite commented,
“The Union Budget 2026 - 27 reinforces strong confidence in India’s growth trajectory, anchored in manufacturing, infrastructure and consumption. The continued focus on domestic manufacturing across chemicals, electronics and capital goods strengthens supply-chain resilience and supports India’s ambition to be a globally competitive production hub. With public capex at ₹12.2 lakh crore, demand across housing, construction and infrastructure-linked industries will remain robust, directly benefiting the building materials and adhesives ecosystem. The emphasis on digital infrastructure, Automation & AI-led Customs reforms and trade facilitation will enhance ease of doing business and global integration. Overall, the Budget provides the confidence to invest, innovate and scale alongside India’s long-term economic vision. Onwards to a Viksit Bharat 2047.”



Feb 03, 2026 12:36 IST
Union Budget From Startup Ecosystem's Perspective #BudgetWithSMEStreet
Manas Pal founder of PedalStart
"The 2026 Budget marks a pivotal moment for India’s startup ecosystem, it’s not just about yearly relief, it’s about building lasting infrastructure, policy stability, and capital availability that founders need to transition from building incremental apps to creating foundational, globally competitive technology companies. This Budget’s focus on expanding digital and data infrastructure, strengthening funding channels, and enabling AI and deep-tech innovation lays a more predictable and strategic foundation for startups to scale, attract investment, and drive global impact". 



Feb 03, 2026 12:34 IST
Insurance Sector's Feedback on Union Budget 2026-27
Credit-Ready Businesses Ecosystem
Ms. Santosh Agarwal, CEO of Paisabazaar, said,
 "Budget 2026 signals a strong leap towards a Viskit Bharat with timely push toward strengthening India’s credit ecosystem, particularly for small businesses and individual taxpayers. The Government has continued its focus on widening access to credit and creating a robust financial system. India’s small businesses have traditionally faced challenges in accessing formal credit; the proposed ₹10,000 crore SME Growth Fund can be a significant step toward energising the growth of the key sector. Additionally, the proposed ₹2,000 crore top-up to the Self Reliant India Fund improves the supply of capital for micro and small enterprises. Together these two initiatives can improve the pipeline of credit-ready businesses and deepen the formal lending ecosystem. Also, with a larger push towards infrastructure development at scale, the government clearly aims to provide fresh impetus to employment generation across sectors.
Special domestic provisions such as ODOP (One District One Product) and policies encouraging multinational companies to establish global data centres in India underscore the government’s proactive approach to changing economic and technological landscapes. As India targets long-term, broad-based economic growth, setting up of a high-level committee on banking for Viksit Bharat can also become an important step towards strengthening the financial sector.
Introduction of Total Return Swaps on corporate Bonds that would allow investors to gain exposure to bonds without directly holding the underlying securities should enhance liquidity and participation. On the direct tax side, the introduction of the Income Tax Act 2025, represents a major step toward simplification of process and rationalisation of assessment. A simplified journey and a removal of ambiguities will ease compliance for individuals and small businesses."



Feb 02, 2026 17:43 IST
MSME and Manufacturing Sectors' Perspective of Union Budget 2026-27
On the Manufacturing Sector
A Vikram Joshe, founder of WAE Ltd expressed his views on Union Budget 2026-27 by adding,

"The Union Budget 2026–27 offers incremental calibration rather than structural relief for India’s SME sector. The headline ₹10,000-crore SME Growth Fund marks a policy shift toward equity and scale-oriented financing, but its reach is inherently limited. It will benefit a narrow cohort of formal, growth-ready firms, while the vast majority of micro and small enterprises, still grappling with thin margins, volatile demand, and delayed payments, remain largely untouched.

Liquidity reforms around TReDS are directionally sound, yet experience suggests platforms alone cannot correct entrenched power asymmetries between large buyers and small suppliers. Without strict enforcement of payment discipline, working-capital stress will persist. Importantly, the budget underplays demand-side constraints, tax complexity, and compliance friction, factors that matter more than capital availability in the post-COVID landscape.

In essence, this is a selective growth budget, not a broad-based SME revival plan. It advances long-term formalisation, but does little to alter the immediate ground reality for most SMEs."
On Hospitality sector


"The Union Budget 2026 offers recognition without resolution for the hospitality sector. Tourism is positioned as a growth and employment engine, with announcements around destination development, connectivity, skilling, and heritage circuits. These measures can expand footfalls over the medium term and improve service quality, but their impact on hotel balance sheets will be indirect and time-lagged.

What the budget notably avoids is the sector’s core structural pain. There is no GST rationalisation, despite clear evidence that a fragmented tax regime distorts pricing and competitiveness. There is also no infrastructure status, targeted credit support, or cost-side relief—critical for a capital-intensive industry still recovering from Covid-era leverage and margin erosion.

In effect, the budget bets on demand creation while sidestepping operating realities such as high taxation, financing costs, and labour pressures. For large chains, the signals are mildly positive. For small and mid-sized operators, this is not a recovery budget, but a continuation budget—strategic in narrative, limited in economic substance."



Feb 02, 2026 17:36 IST
Budget Reaction from Nasscom Foundation #BudgetWithSMEStreet
Yuva Shakti- Driven Budget
Jyoti Sharma, CEO, Nasscom Foundation, commented:
"The Yuva Shakti- driven Budget sets a strong and timely direction for India’s next phase of growth by placing youth and inclusive growth through technology-driven initiatives at the centre of national development. We welcome the proposed ‘Education to Employment and Enterprise’ Standing Committee, which recognises the need for a cohesive, outcomes-driven approach especially for the services sector and the evolving impact of AI on jobs. This signals a continued focus and strengthening of our skilling ecosystem through an integrated employability framework that closely aligns with Nasscom Foundation’s mission of building a future-ready, inclusive talent pool for India.
We are also encouraged by the Budget’s focus on empowering marginalized communities. The creation of Self-Help Entrepreneur (SHE) Marts marks a meaningful transition from livelihood support to women-led enterprise ownership, positioning women as key drivers of local economic growth. Alongside this, initiatives such as the Divyang Kaushal Yojana strengthen the pathway for inclusive skilling and dignified livelihoods for Persons with Disabilities, an area central to our work at the grassroots.
Overall, the Budget 2026-27, with its emphasis on youth, skills, MSMEs, technology and expanded opportunities in Tier II and Tier III India, strongly resonates with our vision of bridging the digital divide and advancing towards a Viksit Bharat."



Feb 02, 2026 17:32 IST
Sector Wise Reactions from Paisabazaar CEO #BudgetWithSMEStreet
Ms. Santosh Agarwal, CEO, Paisabazaar shared some interesting sector-wise impact analysis of Union Budget 2026-27.
Direct Tax
The New Income Tax Act, 2025, will come into effect from April 1, 2026. The platform, procedure and forms have been simplified to enable a common taxpayer file returns without expert assistance. 
No change in income tax slabs has been proposed in the budget. Taxpayers would be able to file returns under both the Old Regime and the New Regime. The ITR filing deadline remains the same, i.e., until 31st July, whereas the deadline for filing the updated return has been updated to 31st March instead of 31st December, but at a nominal fee.
Strengthen Push for Viksit Bharat
A high-level committee on banking would be set up by the government. It will review the banking sector and propose ideas for transformation in line with the requirements of Viksit Bharat without compromising with financial stability, consumer protection and inclusion.
As the initial push for Viksit Bharat, two Public Sector NBFCs, Power Finance Corporation (PFC) and Rural Electrification Corporation (REC), would be restructured to improve efficiency and scalability.
MSME Growth
To ensure MSMEs form a strong backbone and take Bharat ahead, the government has introduced the SME Growth Fund worth Rs. 10,000 crore and create “Champion SMEs”. To continue supporting micro enterprises and provide access to risk capital, Rs. 2,000 crore has been committed to the Self-Reliant India Fund set up in 2021. For rural women-led enterprises, the government would set up community-owned Self-Help Entrepreneurs SHE-Marts retail outlets.
Investment in Bonds
The government would provide a framework for suitable access to Corporate Bonds. Total returns swaps on corporate bonds have also been introduced to encourage participation. An incentive of Rs. 100 crore has been proposed to encourage the issuance of municipal bonds by larger cities in addition to the existing scheme under AMRUT. Exemption from Capital Gains Tax on all Sovereign Gold Bonds issued by the Reserve Bank of India has also been proposed for individuals. 
Focus on AI and IT Sector
National AI and quantum missions, backed by structured research funding, will create the opportunity to apply intelligence where it matters most. This will impact the banking industry in multiple ways - understanding behaviour, improving decision-making, and designing systems that are more inclusive by default. 
Tax Collected at Source (TCS)
The government has reduced TCS on remittances above Rs. 10 lakh for education and medical treatment from 5% to 2%. Overseas tour packages, overseas travel and hotel expenses, etc. will attract a TCS of 2% instead of 5 - 20%.
Futures and Options 
Trading in futures and options will cost more as the government increased the Securities Transaction Tax (STT) rates on Futures to 0.05% from the existing 0.02%. STT on the sale of options has also been raised from 0.1% to 0.15%, and exercise of options will be taxed at 0.15% instead of 0.125%.





Feb 02, 2026 17:04 IST
MSME Perspective Explained on Union Budget 2026-27 #BudgetWIthSMEStreet
Boost to India’s SME ecosystem
Mr. Sudipta Sengupta, Founder & CEO, THIP commented 

The Union Budget 2026–27 offers a pragmatic boost to India’s SME ecosystem by addressing the real friction points that small businesses face - access to capital, faster cash flows, and compliance support. Measures such as the ₹10,000 crore SME Growth Fund, mandatory TReDS adoption for CPSE procurement, and expanded credit guarantees can significantly ease working capital stress. Equally important is the focus on professional support in Tier II and Tier III towns, which strengthens operational resilience beyond metro hubs. By improving liquidity, reducing delays, and formalising trust-based systems, this budget creates a more stable environment for SMEs to focus on productivity, growth, and long-term sustainability rather than short-term survival.



Feb 02, 2026 12:52 IST
Budget Reaction from Agriculture Sector #BudgetWithSMEStreet
Strengthening India’s global agricultural competitiveness
Shashi Kant Singh, Partner  -Agriculture - Food – Agribusiness, PwC India shared his views by saying, "Budget 2026-27 underscores India’s commitment to enhancing agricultural innovation, improving export competitiveness, and promoting women’s empowerment in agriculture—key pillars of the Viksit Bharat strategy. Focused support for high-value crops, along with special incentives for the fisheries and dairy sector, aims to augment farm incomes while strengthening India’s global agricultural competitiveness and boosting exports."