Bengaluru: Industrial bodies expressed mixed reactions to the union budget 2026, welcoming the push for Micro, Small and Medium Enterprises (MSMEs) and manufacturing, but flagging persistent gaps.In the announcement Sunday, Union finance minister Nirmala Sitharaman focused on accelerating manufacturing and boosting the IT sector. She announced multiple measures, including a Rs 40,000 crore outlay for the Electronics Components Manufacturing Scheme, the creation of ‘Champion SMEs’ to support micro and small enterprises, a Rs 10,000 crore SME growth fund, and a Rs 2,000-crore top-up in the Self-Reliant India Fund set up in 2021 for micro enterprises. For Karnataka, known for its vast industrial base and strong IT ecosystem, these measures are expected to provide a significant boost to industries.
However, the industry bodies TOI spoke to flagged multiple gaps, saying small industries continued to struggle with limited credit access and poor awareness of MSME schemes among banks.Uma Reddy, president, Federation of Karnataka Chambers of Commerce & Industry (FKCCI), said: “We expected a dedicated policy for micro and small enterprises, which form 97% of all units in Karnataka. With minimum wages and new labour codes ahead, micro firms that employ 40-50 people and train college dropouts need incentives or flexibility, as many trainees later move to larger companies. Micro enterprises create jobs and build skills at the grassroots, and their costs and efficiency must be factored in.“MG Rajagopal, immediate past president, Karnataka Small Scale Industries Association (KASSIA), said: “Karnataka MSMEs are already facing technology and labour challenges, and higher wages could hurt. Banks are often reluctant to extend MSME benefits unless pressured. Small industries also struggle to access small land parcels, while incentives favour large firms. Despite being major job creators and contributing significantly to GDP and exports, MSMEs feel neglected, with growth funds and collateral-free loans not reaching many units.“Prashant Gokhale, president, Bangalore Chamber of Industry and Commerce (BCIC), said: “We need a stronger focus on innovation and R&D so India can move into high-tech manufacturing and thought leadership. From Karnataka’s perspective, the budget can boost jobs and resilience, especially in semiconductors, electronics and aerospace components, where the state already has a strong base.”DP Danappa, president, Peenya Industries Association, said: “The cost of doing business remains high for MSMEs, while export support, logistics and incentives are still inadequate. Adoption of digital and smart manufacturing is slow, and there is a limited push for technology upgradation. Procurement and marketing support for micro and small enterprises was not strengthened, with no clear budget announcement on market access or public procurement support. A dedicated interest subvention or subsidy scheme for micro and small industries is needed to ease financial and market pressures.”
