During the presentation of the Union Budget 26-27, the Finance Minister, Nirmala Sitharaman, proposed to introduce a market-making framework with suitable access to funds and derivatives on corporate bond indices. She also proposed introducing total-return swaps for corporate bonds.
“To encourage the issuance of municipal bonds of higher value by larger cities, I propose an incentive of ₹100 crore for a single bond issuance of more than ₹1000 crore,” The Minister said.
“The current scheme under Atal Mission for Rejuvenation and Urban Transformation (AMRUT), which incentivises issuances up to ₹200 crore, will also continue to support smaller and medium towns,” Sitharaman noted.
Earlier, the Finance Minister of India, Nirmala Sitharaman, proposed introducing a dedicated ₹10,000-crore SME growth fund to create future jobs and incentivise enterprises based on select criteria. She stated that the government recognises MSMEs as a vital engine of growth, and proposes a three-pronged approach to help them grow as champions.
For equity support, “I propose to introduce a dedicated ₹10,000 crores SME growth fund to create future champions, incentivising enterprises based on select criteria. I also propose to top up the self-reliant India fund set up in 2021 with ₹2,000 crore to continue support to micro-enterprises and maintain their access to risk capital,” she said.
More than ₹7 lakh crore has been made available to MSMEs through liquidity support. “To leverage its full potential, I propose four measures. One: mandate TREDS as the transaction settlement platform for all purchases from MSMEs by CPSEs. Survey as a benchmark for other corporates. Two: introduce a credit guarantee support mechanism through CGT-MSC for invoice discounting on the TREDS platform. Three: link GEN with TREDS for sharing information with financiers about government purchases from SMEs, encouraging cheaper and quicker financing. Four: Introduce TREDS receivables as asset-backed securities, helping develop a secondary market, enhancing liquidity and settlement of transactions,” the Minister said.