Central Government Approves ₹10,000 Crore SME Growth Fund to Benefit Small and Medium Enterprises

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved ₹10,000 crore for the establishment of the 'SME Growth Fund' (SGF) for small and medium enterprises (SMEs) in India. The primary objective of this fund is to enable the rise of leading Indian enterprises in manufacturing, services, technology, and innovation-driven sectors, as well as strategic value chains, by mobilizing growth-oriented capital.

This initiative is part of the announcements made in the Central Budget 2026-27, which aim to provide equity, cash availability, and professional support for the MSME ecosystem. The government observed that existing equity support measures primarily focus on micro and early-stage enterprises, while there has been a structural shortage of equity growth capital for small and medium enterprises.

Under the SME Growth Fund, growth equity capital will be provided to high-potential SMEs. The majority of the fund's resources will be allocated to small and medium manufacturing-focused enterprises. Additionally, SMEs operating in industrial clusters within Tier-II and Tier-III cities will be given priority for this fund.

According to the government, the availability of long-term capital will allow SMEs to expand their operations, adopt advanced technologies, and increase their reach in international markets. Through this initiative, the government will invest a total of ₹10,000 crore in an Alternative Investment Fund established under the industrial growth fund framework.

This fund is expected to improve productivity, enhance export competitiveness, and promote balanced regional industrial development. The government believes that this step will accelerate innovation-based industrialization and create high-quality employment opportunities across the country, serving as a critical pillar toward achieving the goal of 'Viksit Bharat 2047'.