How should the Budget 2026–27 support the digital economy and MSMEs in Tier-2 and Tier-3 cities?
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Synopsis
As the Union Budget 2026–27 approaches, experts emphasize the urgent need for policies that foster the digital economy and support MSMEs in Tier-2 and Tier-3 cities. These initiatives could drive economic growth and job creation, making the budget a pivotal moment for India's development.
Key Takeaways
- Focus on technology adoption for MSMEs.
- Potential to grow MSMEs from 1 lakh to 5 lakh startups.
- Digital economy zones can boost local economies.
- Expectations for a supportive policy framework.
- Union Budget presentation on February 1.
Bengaluru, Jan 21 (NationPress) With the Union Budget 2026–27 just around the corner, experts from various sectors are voicing their expectations, emphasizing the necessity to maintain economic growth and generate extensive employment opportunities.
In an interview with IANS, Sanjeev Kumar Gupta, CEO of the Karnataka Digital Economy Mission, stated that the forthcoming budget must prioritize the swift adoption of technology among micro, small, and medium enterprises (MSMEs).
According to Gupta, MSMEs, particularly those in Tier-2 and Tier-3 cities, currently account for approximately $1.5 trillion of India’s economy and are expanding at nearly 10 percent annually.
“By promoting technology adoption in a structured way, this growth could accelerate to as high as 18 percent,” he noted.
“To achieve this, a clear and supportive policy framework is essential, and I anticipate that the central government will unveil such initiatives in the upcoming budget,” Gupta elaborated.
He also highlighted the importance of establishing digital economy zones in Tier-2 and Tier-3 cities nationwide.
“This initiative could foster the development of around 100 new growth engines, enhancing regional growth and alleviating congestion in major metropolitan areas,” Gupta remarked.
Additionally, Gupta shared another significant expectation from the budget, noting that there are currently about one lakh startups operating in Tier-2 and Tier-3 cities.
He proposed that a dedicated scheme be introduced to increase this figure to five lakh startups, which would greatly expand employment prospects across the nation.
The Union Budget is set to be presented by Finance Minister Nirmala Sitharaman on February 1 at 11 am.
This will mark the first instance since 2000 that the Union Budget is delivered in Parliament on a Sunday.
Previously, the 2025 budget was presented on a Saturday, while the 2015 budget under the late Arun Jaitley was also delivered on a Saturday.
Point of View
It is crucial to prioritize policies that not only stimulate growth but also ensure equitable development across all regions. We must focus on empowering MSMEs in Tier-2 and Tier-3 cities, which hold immense potential for job creation and economic contributions.
NationPress
21/01/2026
Frequently Asked Questions
What are MSMEs?
MSMEs, or micro, small, and medium enterprises, are businesses that play a significant role in India's economy, contributing substantially to employment and economic growth.
Why focus on Tier-2 and Tier-3 cities?
Tier-2 and Tier-3 cities have the potential for rapid growth and can significantly contribute to the overall economy if provided with the right support and resources.
How can the Union Budget impact the digital economy?
The Union Budget can introduce policies and funding aimed at enhancing technology adoption, which is essential for the growth of the digital economy.
What is the expected growth rate for MSMEs?
Experts believe that with supportive measures, the growth rate of MSMEs could increase from 10 percent to as high as 18 percent.
When is the Union Budget 2026–27 being presented?
The Union Budget 2026–27 will be presented by Finance Minister Nirmala Sitharaman on February 1 at 11 am.
