06 October,2026 04:53 PM IST | New Delhi | mid-day online correspondent
Cabinet approves Rs 10,000 crore SME Growth Fund. Representational pic
The Union Cabinet chaired by Prime Minister Narendra Modi on Tuesday approved the government's Rs 10,000 crore commitment to SME Growth Fund, aimed at catalysing growth-oriented capital for India's Small and Medium Enterprises (SMEs) to make them capable of competing globally.
The fund was part of the announcement in the FY27 Budget that sought to provide equity, liquidity and professional support for the MSME ecosystem as a whole, an official statement said.
The approval reflects the government's commitment towards realising the vision of Viksit Bharat 2047 by strengthening India's entrepreneurship ecosystem, deepening the domestic capital market for growth-stage enterprises, and creating a new generation of Indian companies capable of competing at the global level, it stated.
According to the government, there are funds which provide equity support but majority of them focus on early-stage enterprises and cover majorly micro enterprises, which leaves a structural gap for equity growth capital for SMEs.
"Under the initiative, the Government of India will provide an aggregate commitment of Rs 10,000 crore to the Alternative Investment Fund (AIF) established under the SGF (SME Growth Fund) framework. By enabling manufacturing enterprises to expand capacity, adopt advanced technologies and achieve greater scale, the SGF is expected to improve scale, productivity, and strengthen export competitiveness," it said.
"Investments across industrial clusters, including those in Tier-II and Tier-III cities, will support balanced regional industrial development, reinforce local supply chains and generate high-quality employment opportunities," it added.
According to the government data in February, MSMEs account for around 35.4 per cent of manufacturing, around 48.58 per cent of exports, and 31.1 per cent of GDP in India, with over 7.47 crore enterprises employing more than 32.82 crore persons.
Majority allocation from SME Growth Fund will be made towards small and medium manufacturing focused enterprises, and it will also consider SMEs operating in industrial clusters in Tier II and Tier III cities.
"By providing long-term capital, the initiative will enable Indian SMEs to scale operations, invest in technology and manufacturing capacity, expand into international markets, integrate into global value chains, and undertake strategic investments," the statement said.
"The government expects the Fund to accelerate the emergence of a strong pipeline of Indian companies with the scale, innovation capability, and competitiveness required to become champions in their respective sectors," it added.
The SME Growth Fund complements the government's efforts to strengthen the SME sector through reforms, digitalisation initiatives, credit support mechanisms, ease of doing business measures, public procurement reforms, startup promotion initiatives, and production-linked incentive programmes.
