Budget 2026–27: Startups, MSMEs get funding boost, electronics push and tax relief

The Union Budget 2026–27 announced a range of measures aimed at startups, MSMEs and SMEs, focusing on funding access, credit availability, manufacturing support and regulatory easing.

On the funding side, the government proposed three outlays of Rs 10,000 crore each. A fresh Rs 10,000 crore has been allocated to the Fund of Funds for Startups, which will be invested through SEBI-registered venture and alternative investment funds to support early- and growth-stage startups.

For MSMEs, a Rs 10,000 crore MSME Growth and Resilience Fund was proposed to help firms manage global trade pressures and economic shocks. Startups registered under the MSME framework, especially in manufacturing and export-linked sectors, are expected to benefit.

In addition, the Budget proposed Biopharma Shakti, a Rs 10,000 crore programme to support domestic biopharma manufacturing through funding for research, scale-up and production facilities.

To strengthen electronics manufacturing, the Centre said it will nearly double the allocation under the Electronic Component Manufacturing Scheme (ECMS) to Rs 40,000 crore, up from the initial Rs 22,919 crore approved last year. The Finance Minister also announced the rollout of the second phase of the India Semiconductor Mission, as the government nears exhaustion of funds committed under the first phase.

The Finance Minister proposed a tax holiday for foreign cloud service providers operating globally using data centre infrastructure in India until 2047. She also announced support for the Indian Institute of Creative Technologies, Mumbai, to set up AVGC and content-creator labs across 15,000 schools and 500 colleges, aimed at meeting talent demand in the orange economy and creating 2 million jobs by 2030.