Chennai/New Delhi: Industry associations representing micro, small and medium enterprises (MSMEs) and real estate developers on Sunday expressed disappointment over the Union Budget 2026-27, saying it failed to address key concerns of their sectors.

The Association of Indian Entrepreneurs (AIE) said the budget lacked specific measures for MSMEs, despite high expectations from the sector.

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“This is a disappointing budget that increases worries about the future. It is a budget that does not speak of relief. GST should have been restructured to suit value-added tax models. Just as Production Linked Incentives (PLIs) are given to corporates, a 'Value Added Incentive' should have been given to small and micro enterprises,” AIE National Chairman K E Raghunathan said.

“Despite various announcements, allocations and incentives across several sectors, it is disappointing that this budget lacks the specific announcements that the MSME industries highly expected,” he added.

Raghunathan pointed out that while MSMEs have long demanded collateral-free loans, the ground reality remains unchanged despite assurances.

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“To be specific, while the MSMEs have been asking for loans without collateral, the finance minister says this is being implemented. But it is not happening in practice. The Finance Minister said that prices of raw materials must be controlled. But in reality, they are not,” he said.

He also said the budget missed an opportunity to provide emergency support to struggling businesses.

“An Emergency Relief Fund should have been established in the budget for protecting the MSMEs. It has been six months since the US tariffs were imposed and many businesses were on the brink of collapse,” he said.

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“If employment is to be generated, the welfare of small and micro enterprises must be protected. When these businesses are struggling for survival, they are not in a position to focus on alternative paths. The expectation was that this budget would rescue small and micro industries. In reality, it is not,” Raghunathan added.

Meanwhile, realtors’ apex body CREDAI also voiced concern over the absence of concrete measures for affordable housing in the budget.

CREDAI National President Shekhar Patel said the association was “deeply disappointed that the Budget offers nothing concrete for affordable housing.”

With the current definition of affordable housing remaining unchanged, Patel warned that the segment’s share in total housing supply could shrink further.

“With the current outdated definition of affordable housing, the affordable housing segment's share could decline further from 18 per cent to nearly 12 per cent of total housing supply,” he said.

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“This is a serious warning sign for India's lower middle class and middle class. CREDAI believes that affordable housing is not a welfare scheme – it is economic infrastructure. It is a major driver of employment, consumption, and social stability,” Patel added.

He noted that rising construction costs and land prices, without adequate policy support, are discouraging developers from entering the affordable housing segment.

“If affordable housing supply continues to weaken, the consequences are clear: higher rentals, longer commutes, and growth of informal housing,” Patel said.

CREDAI urged the government to give urgent policy attention to affordable housing to ensure inclusive and sustainable urban growth.

However, the association welcomed the government’s continued focus on infrastructure spending, calling it a positive for the real estate sector.

Investments in highways, metros, logistics corridors, railways and urban infrastructure will improve connectivity, unlock new growth corridors and support long-term urban development, it said.

CREDAI also praised the emphasis on ease of doing business.

“Faster approvals, simplified processes, and greater digitisation can significantly reduce project timelines and holding costs, ultimately benefiting both developers and homebuyers,” it added.