Budget 2026-27: Govt To Mandate TReDS For CPSE Purchases

New Delhi, Feb 1 (KNN) In a move aimed at boosting cash flows for the Micro, Small and Medium Enterprises (MSMEs) sector, Union Finance Minister on Sunday proposed to mandate Trade Receivables Discounting System (TReDS) as the transaction settlement platform for all purchases from MSMEs by central public sector enterprises (CPSEs).

Presenting the Budget 2026-27, the Finance Minister said that the move would also serve as a benchmark for other corporates.

She stated that liquidity support worth Rs 7 lakh crore to MSMEs has been made available via the TReDS platform. To further leverage the potential of TReDS platform, the Finance Minister proposed four additional measures to take it to full potential.

Accordingly, TReDS would be mandated as the transaction settlement platform for all purchases from MSMEs by CPSEs.

Further, Sitharaman proposed to introduce a credit guarantee support mechanism through CGTMSE for invoice discounting on TReDS platform. Additionally, the Government eMarketplace or GeM would be linked with TReDS for sharing information with financiers about government purchases from MSMEs, encouraging cheaper and quicker financing.

The fourth measure would be to introduce TReDS receivables as asset-backed securities, helping develop a secondary market, enhancing liquidity and settlement of transactions.

Delayed payments often hurt the MSMEs especially micro enterprises. In order to address this, the government introduced TReDS and digital invoicing.

Commenting on various initiatives announced in the Budget for MSMEs, Federation of Indian Micro and Small & Medium Enterprises (FISME) President Sandeep K. Jain said, ""The essence is in the fine print and we will be analyzing the specific allocations for various schemes. However, one main benefit for MSMEs announced by the Finance Minister in her Budget Speech is making TReDS mandatory for purchases made by Central PSEs. This is a significant victory for the sector that will directly address the perennial issue of delayed payments and unlock much-needed liquidity."

Commenting on Finance Minister's proposal to leverage TReDS platform, Ketan Gaikwad, MD & CEO, RXIL said, "''Mandating TReDS as a transaction/settlement platform by CPSEs is a welcome move, as it will not only ensure timely payments and competitive financing rates for MSMEs, but also provide the government with a transparent, system-led view of MSME payment cycles across CPSEs, setting a strong benchmark for other corporates to follow."

He further said that the proposed extension of CGTMSE credit guarantee support to invoice discounting on TReDS further deepens the availability of working capital for MSMEs and will enable TReDS platforms to onboard a wider and more diverse MSME base.

"Linking the GeM portal with TReDS for sharing information to the financiers will be a major enabler, allowing MSME suppliers  access quicker and cheaper financing in a seamless manner, especially when combined with CPSE participation and credit guarantees," he noted.

(KNN Bureau)