2 hrs ago
Cabinet Approves ₹10,000 Crore SME Fund to Expand Equity Access
The Union Cabinet approved ₹10,000 crore for a fund to help small and medium businesses grow.
The fund is meant for businesses that are already operating and need money to expand.
It will provide long-term investment capital through an Alternative Investment Fund.
The government says many existing equity schemes focus on newer businesses and micro enterprises, leaving a funding gap for growing SMEs.
Much of the fund is expected to support manufacturing businesses.
Companies in industrial areas in smaller cities may also be considered.
Businesses could use the money to increase production or adopt new technology.
They could also use it to reach customers abroad or join global supply chains.
The government hopes this will help Indian companies become more competitive and support local supply chains and jobs.
The Union Cabinet, chaired by Prime Minister Narendra Modi, approved a ₹10,000 crore government commitment to the SME Growth Fund.
Announced in the Union Budget 2026–27, the fund is intended to address a shortage of growth-stage equity funding for small and medium enterprises.
The commitment will go to an Alternative Investment Fund providing long-term capital to established businesses with potential to scale.
Most investments are expected to target manufacturing-focused SMEs; businesses in industrial clusters in Tier-II and Tier-III cities may also be considered.
Companies may use the capital to expand capacity, adopt technology, enter international markets and global supply chains, or make strategic investments and acquisitions.
- Who
- The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the commitment; small and medium enterprises are the intended beneficiaries.
- What
- A ₹10,000 crore government commitment to the SME Growth Fund, which will provide long-term equity capital through an Alternative Investment Fund.
- Where
- India, with industrial clusters in Tier-II and Tier-III cities among the areas whose SMEs may be considered.
- When
- The Cabinet approved it on Tuesday; the initiative was announced in the Union Budget 2026–27.
- Why
- To address a shortage of growth-stage equity funding and help SMEs expand, adopt technology and compete in international markets.
Key facts
- Government commitment
- ₹10,000 crore
- Fund
- SME Growth Fund (SGF)
- Funding structure
- The government commitment will go to an Alternative Investment Fund.
- Intended recipients
- Established small and medium enterprises with potential to scale.
- Investment focus
- A majority of investments are expected to go to manufacturing-focused SMEs.
- Locations highlighted
- SMEs in industrial clusters in Tier-II and Tier-III cities may be considered.
- Related Budget proposal
- The Budget also proposed an additional ₹2,000 crore for the Self-Reliant India Fund, which supports micro enterprises.
Sources
Related news
Cabinet May Approve ₹10,000 Crore SME Growth Fund
Cabinet Approves ₹10,000-Crore SME Fund and Transport Authority
Simple Energy raises ₹1,750 crore for electric scooter expansion
Electropreneur 2.0 Brings Hardware Startup Funding Beyond Bengaluru
India Tech Funding Reaches $10.3 Billion Despite Fewer Deals
PM-SETU Approves Rs 735.70 Crore for Three ITI Clusters
Modi’s 25-Year Public Journey Showcases Five Global-Scale Initiatives
Modi Presents Gujarat Water-Governance Model as Global South Lesson
India’s Gen Z Protests Challenge Democratic Erosion Beyond Politics
Manipur Chief Minister Says Amit Shah May Visit in October
Seva Sankalp Yatra to End With Events in Vadnagar, Varanasi
