Cabinet Approves ₹10,000 Crore SME Growth Fund

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a ₹10,000 crore ($1.06 billion) government commitment to establish the SME Growth Fund (SGF), originally announced in the Union Budget 2026–27. The initiative bridges a critical structural gap in growth-stage equity financing for Small and Medium Enterprises (SMEs), where existing funds predominantly target micro-enterprises or early-stage startups. Structured under an Alternative Investment Fund (AIF) framework, the SGF will provide patient growth equity capital to scale-ready SMEs with proven business viability. The fund is designed to help high-potential enterprises expand capacity, adopt advanced technologies, execute strategic acquisitions, enter global markets, and build competitive strength across manufacturing, services, technology, and strategic value chains. A major portion of the SGF allocation will focus on small and medium manufacturing enterprises, with targeted capital deployment across industrial clusters located in Tier-II and Tier-III cities. By enabling regional SMEs to scale operations and modernize production, the fund aims to boost productivity, enhance export competitiveness, and integrate domestic firms into global supply chains. Furthermore, targeted investments in regional clusters are expected to reinforce local value chains, promote balanced geographic industrial growth, and generate skilled employment. Complemented by existing digital infrastructure, credit guarantees, PLI schemes, and ease-of-doing-business reforms, the SME Growth Fund serves as a key driver for innovation-led industrialization in alignment with the Viksit Bharat @ 2047 roadmap.