In the 2026-27 Union Budget, the Federation of Associations of Cottage and Small Industries (FACSI) insisted that the government provide support in the form of tax breaks, easier access to loans, and simpler regulations for small businesses. They believe these changes will help these businesses grow and play a stronger role in the overall economy.
FACSI president H K Guha, in a pre-budget letter to Finance Minister Nirmala Sitharaman, specified the suggestions were mentioned post consultations with distinct associations of entrepreneurs and MSE groups across the country.
The industry body, among the demands, asked for the constitution of an exclusive council for small and micro enterprises under the Ministry of MSME, a higher exemption threshold under the GST regime and a single, facilitated GST return for small units.
FACSI asked for statutory collateral-free lending of up to ₹1 crore for MSEs at an interest cap of 6-7 percent including an interest subvention in the durations of financial stress, and automatic renewal of working capital limits for units complying with banking norms.
The federation, showing liquidity concerns, asks for GST refunds within 15 days, with statutory interest for delays by the government, and decriminalisation of procedural lapses of GST returns, labour and local laws.
FACSI, concerning export-oriented units, proposed the creation of an Export Risk Equalisation Fund to compensate small exporters impacted by a sudden tariff rise, besides the enhancement of lending targets for MSEs by SIDBI and public sector banks.
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The letter asked for the reduction in fees for MSEs filing tenders via the GeM portal and robust operations of State Facilitation Councils to expedite cases of late payments, noting that specific issues would need revisions in the MSMED Act, 2006.
A coordination with State governments to extend subsidies on renewable energy installations, electricity charges and local levies, and to deliver special facilities for units located in industrial estates run by State development corporations is required, FACSI outlined.
Guha cited that such measures shall be a significant enabler for the growth of MSEs in India.
