Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27 on February 1, 2026. She brought major updates for small business owners and the MSME sector to solve their daily cash flow problems. The biggest announcement is connecting the Government e-Marketplace (GeM) with the TReDS platform. This step aims to help small businessmen get money faster for their pending orders and manage their working capital better.
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How will GeM and TReDS integration help businesses?
The government wants to share official purchase data directly with banks and lenders. When GeM is linked to TReDS, financiers can see the verified government orders received by MSMEs. Based on this information, they can offer loans quickly and at lower interest rates.
This integration removes the long waiting period for capital. Since the data comes from a government portal, banks face less risk, and shop owners or manufacturers get the cash they need to complete their orders without running around for papers.
What are the new funding announcements?
The Finance Minister mentioned that more than ₹7 lakh crore funding has already reached MSMEs through various liquidity measures. To keep this flow smooth and safe, the government is bringing specific changes.
- Credit Guarantee: A new support system through CGTMSE will help in bill discounting on the TReDS platform.
- Safety for Banks: This guarantee reduces the risk for lenders when they give money against pending bills.
- Asset Securities: TReDS receipts will now be used as asset-backed securities to bring more liquid cash into the market.
Is TReDS mandatory for government companies?
Yes, the government has taken a strict step regarding payments. It is now mandatory for all Central Public Sector Enterprises (CPSEs) to use the TReDS platform for paying MSMEs. This ensures that small suppliers get their dues settled electronically and on time.
Additionally, the budget introduced a dedicated SME Growth Fund of ₹10,000 crore. This fund focuses on creating future jobs and supporting developing small businesses. The government also plans to revitalize 200 old industrial clusters to make production cheaper and more efficient.
