Centre Clears ₹10,000 Crore SME Growth Fund
Fund to provide growth equity to small and medium enterprises and help build globally competitive Indian companies
- Cabinet approves ₹10,000 crore SME Growth Fund.
- Fund targets growth-stage small and medium enterprises.
- Manufacturing and Tier-II, Tier-III clusters get focus.
- Initiative aims to create globally competitive Indian companies.
GG News Bureau
New Delhi, 6th Oct: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Tuesday approved the Government of India’s commitment of ₹10,000 crore towards the establishment of the SME Growth Fund (SGF), aimed at giving India’s small and medium enterprises greater access to growth capital.
The initiative, announced under Union Budget 2026-27, is designed to provide direct equity support to growth-oriented SMEs and help create a new generation of Indian companies capable of competing globally.
The government said a clear gap exists in the availability of long-term equity capital for small and medium enterprises. While several existing funds support early-stage businesses, their focus is largely on micro enterprises, leaving growing SMEs with limited access to risk capital.
The SME Growth Fund will seek to bridge this gap by providing patient growth equity to businesses with proven viability and the potential to scale.
Focus on manufacturing and emerging enterprises
A majority of the Fund’s allocation will be directed towards small and medium manufacturing enterprises. SMEs operating in industrial clusters in Tier-II and Tier-III cities will also be considered.
The government expects the Fund to help businesses expand their operations, increase manufacturing capacity, adopt advanced technologies, enter international markets, integrate with global value chains and undertake strategic investments.
The initiative is also aimed at helping promising SMEs move beyond their current scale and emerge as industry leaders and future Indian champions.
₹10,000 crore commitment to AIF
Under the scheme, the Government of India will provide an aggregate commitment of ₹10,000 crore to the Alternative Investment Fund (AIF) established under the SME Growth Fund framework.
The initiative will complement the government’s existing measures for strengthening the SME ecosystem, including credit support, digitalisation, ease-of-doing-business reforms, public procurement measures, startup promotion and production-linked incentive programmes.
The government said investments in industrial clusters, particularly in smaller cities, can strengthen local supply chains while creating quality employment opportunities.
By improving access to long-term capital, the Fund is expected to support productivity, innovation, manufacturing expansion and export competitiveness.
The government said the initiative will contribute to the broader Viksit Bharat @ 2047 vision by strengthening India’s entrepreneurship ecosystem, deepening the domestic capital market for growth-stage enterprises and encouraging innovation-led industrialisation.
