KASSIA Welcomes Value Chain & Cluster Modernisation, Says Compliance & Credit Reforms Crucial For MSMEs

Bengaluru, Feb 1 (KNN) The Karnataka Small Scale Industries Association (KASSIA) has welcomed the Union Budget 2026–27, saying it lays a strong foundation for the growth of micro and small enterprises (MSEs), while also flagging areas that require further policy attention.

KASSIA said the Budget’s focus on strengthening domestic manufacturing, scaling MSMEs, and improving infrastructure reflects a broad-based development approach.

According to KASSIA President B.R. Ganesh Rao, key measures such as the Rs 10,000 crore SME Growth Fund, the Rs 2,000 crore top-up to the Self-Reliance India Fund, and support for traditional sectors are expected to improve access to capital and encourage competitive, export-oriented, and technology-driven small businesses.

“While the budget’s thrust on value chain development and cluster modernisation can unlock new pathways for small industries, additional focus on simplifying regulatory compliance, reducing input costs, and enhancing credit processes will be crucial,” said Rao.

He stressed that policy implementation must better address ground-level challenges, particularly for labour-intensive and credit-constrained micro enterprises.

KASSIA said several MSE-dominated sectors stand to benefit from the Budget proposals.

Textile initiatives, including the National Fibre Scheme and mega textile parks, are expected to modernise traditional clusters and support small manufacturers.

Engineering goods, precision components, auto parts, gems and jewellery, and small exporters are also likely to gain from infrastructure spending, export facilitation, and supply chain reforms, though targeted incentives and duty rationalisation remain key demands.

The association welcomed steps to streamline MSME financing, including mandatory use of TReDS and enhanced professional support to help small firms manage compliance and market access, particularly in Tier II and Tier III cities.

Overall, KASSIA described the Budget as growth-oriented and sector-enabling for micro and small industries. However, it noted that some of its recommendations submitted to the Finance Minister were not incorporated, which could have provided additional relief to the manufacturing sector.

(KNN Bureau)