India’s Viksit Bharat aspiration by 2047 is no longer a distant vision. It is now reflected in near-term choices about productivity, competitiveness, and jobs. The Union Budget 2026–27 sharpens this focus, emphasizing the institutional and economic capacity required to sustain high growth and broaden participation.
The budget builds on foundations laid steadily over the past decade. Digital public infrastructure, financial inclusion, formalisation, and entrepreneurship promotion have reshaped how businesses interact with the state and the market. The question now is how to convert this access into sustained enterprise capability.
The Role of Small and Mid-sized Businesses
At the heart of this capacity-building agenda lies a clear recognition: India’s next phase of development will be shaped not only by large corporations or high-growth startups, but by the ability of small and mid-sized businesses to scale, formalise, and compete.
Realising the Viksit Bharat vision demands India generate productive, family-sustaining jobs, higher incomes, and competitiveness across sectors and regions. Small and mid-sized businesses are critical to this outcome. MSMEs account for roughly a third of India’s GDP and close to half of its exports. They anchor regional employment, turning national growth into household prosperity. Operating largely in Tier II and Tier III cities, they are situated in places where future employment growth must occur.
Expanding the “Missing Middle”
The budget’s focus on strengthening MSMEs reflects an understanding that India’s “missing middle” of scaled, professionally run enterprises must expand significantly over the next two decades. Measures aimed at easing growth-stage financing and reducing operational friction directly respond to this structural gap. Without this expansion, the demographic dividend risks turning into a demographic constraint.
India has improved access for small businesses through digital payments, GST, Udyam registration, public procurement platforms, and expanded credit mechanisms. Budget 2026 extends this trajectory by addressing key friction points that constrain enterprises from growing once they enter the system.
Key Budgetary Measures
Self-Reliant India Fund: Enhancements to build on existing growth-stage financing.
Trade Receivables Discounting System (TReDS): Mandated usage for central public sector enterprises and public procurement integration to address liquidity and cash-flow challenges.
Industrial Clusters: A proposal to revive legacy clusters to unlock collective productivity gains through shared infrastructure and supplier networks.
Corporate Mitras: Introduced to reduce the compliance burden for small businesses, particularly those outside major metropolitan areas.
Together, these measures improve the enterprise environment by lowering transaction costs and improving predictability. However, the next phase of reform must move beyond access toward building enterprise capability at scale.
Technology and Ecosystem-Driven Models
Capability-building requires systems that help enterprises learn, decide, and execute repeatedly. In India, the scale and diversity of the MSME base demand a technology-enabled approach. Digital platforms can make high-quality guidance accessible, and AI can personalise support based on context.
Entrepreneurial philanthropy and mission-driven institutions can complement public policy by addressing complex systems challenges that require experimentation and long-term commitment.
Localized Growth and Skilling
Enterprise growth is inherently contextual. A manufacturing firm in Gujarat faces different constraints than an agribusiness in a rural market. Therefore, support systems work most effectively when local ecosystems serve as the unit of delivery. This aligns with the budget’s emphasis on city economic regions and regional growth engines.
Furthermore, a persistent challenge has been the misalignment between skilling and employment. By treating business growth and job fulfilment as a single system, skilling initiatives can respond to the predictable talent needs of scaling enterprises. When demand, skilling, and placement are aligned, job creation becomes more durable.
Conclusion: From Intent to Outcomes
Budget 2026 reflects a maturation of India’s development strategy—from access to capability, from schemes to systems, and from intent to outcomes. This shift requires coordinated execution by government, industry, and financial institutions.
Viksit Bharat will be achieved through the cumulative effect of millions of enterprises becoming more productive and resilient. Success will be measured not by the number of schemes launched, but by enterprises that hire confidently, invest predictably, and compete beyond their local markets.
Online Source: Hindustan Times
