MSME-centric states such as Tamil Nadu are expected to receive a significant boost from the Union Budget announcement to create champion MSMEs through dedicated equity support, alongside continued growth capital for micro-enterprises.The ₹10,000 crore SME Growth Fund and strengthened liquidity support through the TReDS (Trade Receivables Discounting System) mechanism are to provide much-needed financial depth to micro and small enterprises. In addition, the Budget has introduced a dedicated support scheme for micro enterprises under a special category. With the SME Growth Fund and the mandatory use of TReDS for CPSE (Central Public Sector Enterprise) purchases, the govt is providing small businesses with the structural support required to scale. “This enhances our ability to extend targeted credit and support MSME growth across regions,” said Ajay Kumar Srivastava, MD and CEO, Indian Overseas Bank. “Mandating TReDS as the transaction settlement platform for all purchases from MSMEs by CPSEs clearly makes it compulsory for public sector undertakings. This should definitely help MSMEs, particularly in ensuring timely payments. The move should also serve as a benchmark for corporates,” said S Chandramohan, director and group president (Finance & Investment), TAFE Ltd. Liquidity support through TReDS and the SME Growth Fund is expected to boost credit absorption, encourage formalisation, promote entrepreneurship, and sustain job creation, said Ramesh Babu, MD & CEO, Karur Vysya Bank. “TReDS securitisation is a funding booster for MSMEs,” said Aparna Kirubakaran, Director, CRISIL Ratings. “By enabling the securitisation of trade receivables under the TReDS platform, the measure directly supports MSMEs’ working-capital needs through wider access to funding, potentially lower financing costs, and improved liquidity.”
