Budget 2026 expectations: MSME sector wants policy support from Centre to reinforce GST reform measures

Budget 2026 expectations: Micro, small and medium enterprises (MSMEs) in India are looking forward to Union Budget 2026 reinforcing GST reforms, ensuring operational ease and continuity for the sector, a NeoInsights study showed.

As many as 86% of MSMEs expect business growth in 2026 aided by GST reforms and are pinning hopes on Finance Minister Nirmala Sitharaman's Budget taking up measures that can reinforce operational ease and continuity.

“MSMEs prioritise easier access to working capital, continued government support and digital capacity building from Budget 2026,” the 10th NeoInsights report said.

MSMEs optimistic in 2026: What did the study show?

• Released by SME focused NBFC NeoGrowth, the study noted that around 80% of MSMEs saw business improvement in the last few months.
• Further, one in two participants said they intended to take business loans to expand business in 2026.
• Participants included over 2,000 MSMEs from 25 cities in India.
• Over 71% MSMEs said they plan to expand their shop or open a new outlet, showing strong confidence in scaling physical presence.
• While 30% intend to add more products or brands, reflecting efforts to widen offerings and capture incremental demand.
• Among segments, consumer facing MSMEs saw visible improvement in demand, with players in the auto, beauty, food and beverage, auto and wellness sectors making most gains.

Budget 2026 offers growth opportunity: Expectations

The study noted that MSMEs are looking towards the Budget offering measures that can reinforce operational ease and continuity.

• Around 25% of MSMEs highlighted the importance of faster and improved access to government schemes, alongside continued simplification of GST and compliance processes.
• A number of MSMEs also noted the role of digital tools and online payments in improving efficiency, transparency, and customer reach.

Logistics: ‘Need stronger policy support to scale responsibly’

Suresh Bansal, Founder & CEO of DCGpac and Board Member of DTDC told Mint, that as India enters the next phase of economic growth, the Union Budget “must reinforce its commitment to sustainable manufacturing, MSME enablement, and technology-led supply chains”.

Bansal noted that among sectors, “packaging, logistics, and e-commerce form the invisible backbone of India’s consumption economy, yet they need stronger policy support to scale responsibly”.

“We expect the Budget to prioritise incentives for recyclable and eco-friendly packaging, rationalise GST structures on sustainable materials, and accelerate adoption of circular economy models such as reuse and packaging-as-a-service. Enhanced credit access and faster GST refunds for MSMEs will significantly improve liquidity and resilience across the value chain,” Bansal added.

He also emphasized the need for continued investment in digital infrastructure, AI adoption, and skill development, to foster competition on global level.

Gems and jewellery: ‘Want support for women-led enterprises, easier access to credit’

According to Dishi Somani, Founder of Dishis Designer Jewellery, she hopes to see policy measures that support India’s handcrafted and design-led jewellery sector in Budget 2026.

Key expectations include: Rationalisation of GST on handcrafted jewellery, improved clarity on compliance norms, Budgetary support for MSMEs, especially women-led enterprises, easier access to credit, and incentives for exports.

“A budget that recognises the value of artisanship, encourages entrepreneurship, and promotes ‘Make in India’ jewellery will go a long way in nurturing creativity, employment, and long-term growth in the sector,” she added.

Beauty and wellness: ‘Address twin challenges of affordability and structural growth’

Ankit Virmani, Director of Esskay Beauty Resources feels that in order to truly democratize beauty and wellness in India, the upcoming Budget must address the twin challenges of affordability and structural growth.

“With volatile forex rates driving up input costs, the escalation in prices is being felt acutely by both salons and end-consumers. We urge the government to rationalize GST and reduce customs duties on essential imports and raw materials,” Virmani said.

He also pointed out to the need for formalisation of the segment, noting, “While the sector falls under the MSME ambit, a vast majority remains unorganized. We look forward to a framework where Skill Council certifications are linked to MSME incentives. This would encourage compliance, standardize service quality, and unlock sustainable employment opportunities.”

MSME financing: ‘Strengthening digital infrastructure important’

Kunal Jhunjhunwala, Founder and CEO of airpay said that with the upcoming Budget, MSMEs need more regulatory clarity on cross-border payments in order to expand and engage in international trade.

“Fintech and digital payments must move beyond prioritising scale to focus on resilience, compliance, and the depth of adoption. The policies in place will not only determine the growth trajectory of the next phase but also influence the digital infrastructures that will be built under regulation,” he stated.

Further, Jhunjhunwala added that adoption of cutting-edge technologies, such as AI-based risk management and fraud detection, will build trust, resilience, and productivity across India's financial ecosystem.

On the matter on credit access, Rajat Deshpande, CEO & Co-Founder of FinBox told Mint that the government’s focus on improving MSME credit access ahead of Budget 2026 is a positive signal. But added that for many small businesses, the issue isn’t availability of credit alone — it’s the speed, predictability, and ease of the process.

“Strengthening digital infrastructure to support smoother data sharing and credit workflows can help address this, provided it leads to real simplification on the ground. Effective implementation will be key to translating policy intent into better outcomes for MSMEs,” he added.