The Union Cabinet, under Prime Minister Shri Narendra Modi's leadership, has approved a commitment of Rs.10,000 crore for the establishment of the SME Growth Fund to provide growth-oriented capital for Small and Medium Enterprises.
On October 6, 2026, the Union Cabinet, chaired by Prime Minister Shri Narendra Modi, gave its approval for a government commitment of Rs.10,000 crore towards the establishment of the SME Growth Fund (SGF). This fund is designed to catalyze growth-oriented capital for India's Small and Medium Enterprises (SMEs), enabling the emergence of champion Indian enterprises across various sectors.
According to Para 28 of Union Budget 2026-27, the SGF aims at supporting SMEs in manufacturing, services, technology, innovation-driven sectors, and strategic value chains. Existing funds primarily focus on early-stage enterprises and micro enterprises, leaving a structural gap for equity growth capital for Small and Medium Enterprises.
The landmark initiative reflects the Government's commitment towards realizing the vision of Viksit Bharat 2047 by strengthening India’s entrepreneurship ecosystem, deepening the domestic capital market for growth-stage enterprises, and creating a new generation of Indian companies capable of competing at the global level.
The SGF is envisioned as a transformational instrument to support enterprises at critical inflection points in their growth journey. Majority allocation from SGF will be made towards small and medium manufacturing focused enterprises. Fund will also consider SME’s operating in industrial clusters in Tier II and Tier III cities.
By providing long-term capital, the initiative will enable Indian SMEs to scale operations, invest in technology and manufacturing capacity, expand into international markets, integrate into global value chains, and undertake strategic investments. The Government expects the Fund to accelerate the emergence of a strong pipeline of Indian companies with the scale, innovation capability, and competitiveness required to become champions in their respective sectors.
Source:
Press Information Bureau
