Government Launches Major Funding for MSMEs and Startups

- The ₹2,000 crore infusion into the Self-Reliant India (SRI) Fund is part of a larger ₹50,000 crore corpus designed to provide equity support, which has already invested ₹15,442 crore in 682 MSMEs as of November 30, 2025. - The Startup India Fund of Funds 2.0 builds on its predecessor (FFS 1.0), which committed its entire ₹10,000 crore corpus to 145 Alternative Investment Funds, leading to investments of over ₹25,500 crore in more than 1,370 startups. - This new funding for deep tech arrives as investments in the sector are surging; deep tech funding reached $324 million in the first four months of 2025, a twofold increase from the same period in 2024. - To address liquidity issues for small businesses, the budget mandates that all Central Public Sector Enterprises (CPSEs) must use the Trade Receivables Discounting System (TReDS) for payments to MSMEs, a platform that has already processed over ₹7 lakh crore. - The focus on startups outside major metros aligns with recent trends, as over 50% of new startups now originate from Tier-2 and Tier-3 cities, where social media is a primary product discovery channel for 70% of online shoppers. - The MSME sector, which will benefit from the new funds, contributes 31.1% to India's GDP and 48.58% to its exports, according to the Economic Survey 2025-26. - The SME Growth Fund signals a policy shift toward providing patient equity capital for growth, moving away from a primary reliance on debt, which can increase financial strain on scaling businesses. - These initiatives are complemented by digital platforms like the Open Network for Digital Commerce (ONDC), which aims to bring small sellers online, reducing their dependence on large e-commerce platforms and high commission fees.