Written by Aanchal MagazineDecember 26, 2025 08:54 PM IST 3 min readAIE has sought interest-free loan assistance to be extended for import substitution development costs to micro enterprises. (PTI/File Photo)A “fair access” to credit, an export risk equalisation fund to compensate micro exporters impacted by sudden tariff hikes, temporary duty drawback enhancement and interest relief during tariff shocks — these are some of the measures being sought by representatives of micro, small and medium enterprises (MSMEs) from the Finance Ministry in the upcoming Union Budget for 2026-27.The MSMEs have also sought reasonable compliance norms from the government, seeking higher exemption thresholds under the Goods and Services Tax (GST) regime and a single simplified GST return for micro units.In a letter to Union Finance Minister Nirmala Sitharaman on December 26, the Association of Indian Entrepreneurs (AIE), a Chennai-based association of gig workers, traders, micro entrepreneurs, and self-employed, also sought statutory collateral-free lending up to Rs 1 crore for micro enterprises with a 6-7 per cent interest cap in addition to interest subvention during stress periods, as a built-in counter-cyclical tool. Also, the AIE has sought interest-free loan assistance to be extended for import substitution development costs to micro enterprises.“Micro enterprises today are operating under extraordinary stress — not due to inefficiency, but due to policy asymmetry, external shocks, and structural neglect. While India aspires to become a global manufacturing and export hub, the smallest units that feed the supply chain are being systematically weakened. Unless decisive, budget-backed interventions are announced in Union Budget 2026–27, a large section of micro enterprises will silently exit, causing irreversible damage to employment and domestic manufacturing capacity,” KE Raghunathan, Founder Chairman, AIE said in the letter.The MSMEs are seeking simplified compliance norms from the government in the form of higher exemption thresholds and a single simplified GST return for micro units. They have also sought time-bound GST refunds within 15 days with statutory interest for government delays. “Complete decriminalisation of procedural lapses — no prosecution for minor errors. Unified Annual Compliance Return replacing multiple filings under GST, labour, and local laws,” the letter stated.Given the global tariff war, the AIE has also sought coverage from exchange rate shocks, recommending a forex fluctuation protection scheme for micro enterprises with limited hedging capacity. The MSMEs have also suggested that the Reserve Bank of India could consider simplified hedging instruments with subsidised cost for micro units.Micro enterprises are the first to be hit and last to be supported during global disruptions, Raghunathan said, adding that there should be an ‘Emergency Working Capital Window’ when wars disrupt raw materials, fuel, and shipping routes. The Association has also suggested a freight equalisation subsidy for micro exporters during abnormal container shortage and freight volatility along with priority access to containers for micro exporters through public sector shipping companies and ports.Aanchal Magazine is a Senior Assistant Editor with The Indian Express, serving as a leading voice on the macroeconomy and fiscal policy. With over 13 years of newsroom experience, she is recognized for her ability to decode complex economic data and government policy for a wider audience. Expertise & Focus Areas: Magazine’s reporting is rooted in "fiscal arithmetic" and economic science. Her work provides critical insights into the financial health of the nation, focusing on: Macroeconomic Policy: Detailed tracking of GDP growth, inflation trends, and central bank policy actions. Fiscal Metrics: Analysis of taxation, revenue collection, and government spending. Labour & Society: Reporting on labour trends and the intersection of economic policy with employment. Her expertise lies in interpreting high-frequency economic indicators to explain the broader trajectory of the Indian economy. Personal Interests: Beyond the world of finance and statistics, Aanchal maintains a deep personal interest in the history of her homeland, Kashmir. In her spare time, she reads extensively about the region's culture and traditions and works to map the complex journeys of displacement associated with it. Find all stories by Aanchal Magazine here ... Read More © The Indian Express Pvt LtdTags:Budget