Central Government Approves ₹10,000 Crore SME Growth Fund to Provide Equity Investment for Small and Medium Enterprises

The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved ₹10,000 crore for the establishment of the 'SME Growth Fund' (SGF) for small and medium enterprises in India. The primary objective of this fund is to provide growth-oriented capital to Indian enterprises in the manufacturing, service, technology, and innovation-driven sectors, enabling them to become leaders in strategic value chains.

This initiative is part of the announcements made in the Central Budget 2026-27, which aim to provide equity, cash availability, and professional assistance for the MSME ecosystem. According to the government, most of the equity support currently available is focused on early-stage and micro-enterprises, while there is a structural shortage of growth capital for small and medium enterprises. The SME Growth Fund has been created specifically to bridge this gap.

The main features and objectives of the fund are as follows:

Capital Allocation: The government will invest a total of ₹10,000 crore in an alternative investment fund established under the framework of the Industrial Development Fund.

Priority Sectors: The majority of the fund's amount will be allocated to small and medium manufacturing-focused enterprises. Additionally, special consideration will be given to SMEs operating in industrial clusters within Tier-II and Tier-III cities.

Growth Opportunities: This long-term capital will enable enterprises to increase their operational capacity, adopt advanced technologies, expand into international markets, and integrate with global value chains.

The government believes that this initiative will bring balance to the country's industrial growth, strengthen local supply chains, and create high-quality employment opportunities. This step will serve as a significant pillar in accelerating innovation-based industrialization and achieving the goal of 'Viksit Bharat' by 2047.