India’s micro, small and medium enterprises (MSMEs) are looking to the Union Budget 2026-27 for policy measures that reinforce GST reforms, improve operational ease, and ensure business continuity, according to a recent NeoInsights study.
The study indicates strong optimism across the sector, with 86% of MSMEs expecting business growth in 2026, supported by GST-related improvements and broader economic stability. Many enterprises are hoping that Finance Minister Nirmala Sitharaman’s Budget proposals will further ease compliance and enhance access to capital.
MSME Confidence Remains Strong in 2026
Released by NeoGrowth, an NBFC focused on small businesses, the 10th NeoInsights report found that nearly 80% of MSMEs have seen business improvement in recent months. Key findings from the survey, which covered over 2,000 MSMEs across 25 Indian cities, include:
- Around 50% of respondents plan to take business loans in 2026 to expand operations
- Over 71% intend to expand their shops or open new outlets, reflecting confidence in physical expansion
- About 30% plan to add new products or brands to capture incremental demand
Consumer-facing MSMEs reported stronger demand recovery, particularly in automobile, beauty, food and beverage, and wellness segments.
Budget 2026: Focus on Operational Ease and Continuity
The study highlighted that MSMEs are expecting Budget 2026 to reinforce operational ease and business continuity. Around 25% of MSMEs emphasised the need for:
- Faster and more effective access to government schemes
- Continued simplification of GST and compliance processes
Many respondents also acknowledged the growing role of digital tools and online payments in improving efficiency, transparency, and customer reach.
Logistics and Packaging: Call for Stronger Policy Support
Industry experts pointed out that sectors such as packaging, logistics, and e-commerce form the backbone of India’s consumption economy but require stronger policy backing to scale sustainably. Expectations from the Budget include:
- Incentives for recyclable and eco-friendly packaging
- Rationalisation of GST on sustainable materials
- Support for circular economy models, including reuse and packaging-as-a-service
Experts also stressed that enhanced credit access and faster GST refunds would significantly improve liquidity and resilience across MSME value chains. Continued investment in digital infrastructure, AI adoption, and skill development was flagged as critical for global competitiveness.
Gems and Jewellery: Support for Women-Led MSMEs
Stakeholders from the gems and jewellery sector expressed hopes that Budget 2026 will support handcrafted and design-led enterprises, particularly those led by women. Key expectations include:
- Rationalisation of GST on handcrafted jewellery
- Clearer compliance norms
- Easier access to credit for MSMEs
- Export incentives to support global outreach
Industry participants believe recognising artisanship and promoting Make in India jewellery can boost employment and long-term sectoral growth.
Beauty and Wellness: Addressing Cost Pressures and Formalisation
Experts from the beauty and wellness sector said Budget 2026 should address affordability challenges and structural growth constraints. With volatile foreign exchange rates pushing up input costs, the sector has urged the government to:
- Rationalise GST
- Reduce customs duties on essential imports and raw materials
They also highlighted the need to link Skill Council certifications with MSME incentives to promote formalisation, improve service quality, and create sustainable employment opportunities.
MSME Financing: Emphasis on Digital Infrastructure
Fintech and payments experts noted that MSMEs need greater regulatory clarity on cross-border payments to expand international trade.
They emphasised that digital finance policies must focus on resilience, compliance, and depth of adoption, not just scale. Adoption of AI-based risk management and fraud detection was highlighted as essential to strengthening trust and productivity across the financial ecosystem.
On credit access, experts welcomed the government’s focus but noted that MSMEs also need improvements in speed, predictability, and ease of lending processes. Strengthening digital infrastructure for smoother data sharing and credit workflows will be key to translating policy intent into tangible outcomes.
Outlook Ahead of Budget 2026-27
Overall, MSMEs view Budget 2026–27 as a critical opportunity to build on GST reforms, simplify compliance, strengthen credit flows, and support sustainable growth. Industry stakeholders expect targeted policy measures that balance ease of doing business with long-term resilience and competitiveness.
Source: LiveMint