PHDCCI proposes strategic financial reforms to strengthen MSME Credit, boost Equity Investment and expand Access to Capital

New Delhi, November 10, 2026:  The PHD Chamber of Commerce and Industry (PHDCCI), in a meeting with Hon’ble Finance Minister, Smt. Nirmala Sitharaman submitted its Pre-Union Budget 2027–28 recommendations, proposing key reforms to deepen capital markets and strengthen MSME financing. “We acknowledge the Government’s initiatives to strengthen the industrial and MSME ecosystem, particularly through improved access to finance, credit guarantees, equity funding and resolution of delayed payments.”, said Anil Gupta, President, PHDCCI. 
The MSMEs are the backbone of India’s economy. They contribute about 31% to India’s GDP, account for 48.58% of total exports, and generate around 35.4% of manufacturing output. The sector encompasses more than 7.47 crore enterprises across manufacturing, services, and trade activities and provides livelihoods to approximately 32.8 crore people. 
“To strengthen India’s MSME ecosystem further, PHDCCI recommends the change in classification of non- performing assets (NPA), enhancement of PM MUDRA Loan Limits, strengthening CGTMSE Implementation and Direct Equity Support”, added Gupta. 
The priority recommendations are as follows: 
1. Rationalisation of Capital Market Taxation: Abolish LTCG tax on equity investments, reduce STCG tax from 20% to 10%, and lower STT rates to encourage long-term investment and improve India's capital market competitiveness.
 2. Revision of MSME NPA Classification Norms: Extend the overdue period for NPA classification from 90 to 180 days to accommodate longer working capital cycles and delayed realisation of receivables. 
3. Enhancement of PM MUDRA Loan Limits: The Scheme was launched on April 8, 2015 with the objective of providing access to institutional collateral free credit to micro enterprises. 25405640 PMMY Loans have been sanctioned, amounting to Rs 343223.27 crore of which Rs 332413.04 Crore have been disbursed, as on November 2026 (provisional). Increase loan ceilings to ₹1 lakh under Shishu, ₹10 lakh under Kishore and ₹20 lakh under Tarun/Tarun Plus categories to reflect rising project costs. 
4. Direct Equity Support to MSMEs: Provide direct government equity investment through the Fund of Funds Scheme, with dedicated allocations for start-up seed capital and SME IPO participation. 
5. Strengthening CGTMSE Implementation: Ensure effective collateral free lending through stricter compliance by banks and establish a centralized portal for tracking applications and monitoring rejection reasons.
 “We believe that ease of access to credit, equity support, rationalisation of taxation and strong implementation of Government schemes will foster faster growth of Indian industry as a global manufacturing hub”, said Dr. Ranjeet Mehta, SG & CEO, PHDCCI.