Budget 2026-27: MSMEs Want Tax Relief and Better Credit

The upcoming Union Budget 2026-27 is expected to focus on helping Micro, Small and Medium Enterprises (MSMEs) with easier taxes and better access to loans. Industry groups have asked the government to reduce costs and simplify rules for small businesses.

Key Expectations

• Tax Relief: Lower TDS rates and a simpler tax structure to boost spending.
• Credit Support: Possible return of an interest benefit scheme for MSMEs with about a 2% subsidy on new loans.
• Fiscal Deficit: Government aims to reduce fiscal deficit to about 4.4% of GDP in FY26.
• Infrastructure Spending: More funds for railways, roads and urban projects.

Industry Demands

• MSMEs: Easier loans, fewer compliance hurdles and support to grow.
• Pharma: Lower GST on key inputs, tax benefits for R&D and larger manufacturing incentives.
• Retail: Clarity on the National Retail Policy to simplify licensing and improve access to credit.

Budget Focus

The budget may push for higher consumer spending, stronger manufacturing and smoother banking processes. It may also stress keeping debt in check while encouraging investments from the private sector.