The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved a commitment of Rs.10,000 crore towards the establishment of the SME Growth Fund (SGF). The fund aims to provide equity growth capital for Small and Medium Enterprises, particularly those focused on manufacturing and strategic value chains.
The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, today approved the Government of India’s commitment of Rs.10,000 crore towards the establishment of the SME Growth Fund (SGF). The SGF is aimed at catalyzing growth-oriented capital for India's Small and Medium Enterprises (SMEs) and enabling the emergence of champion Indian enterprises across manufacturing, services, technology, innovation-driven sectors, and strategic value chains as per Para 28 of Union Budget 2026-27. This was in part of a holistic set of announcements that were made in Union Budget 2026-27 focussing on providing equity, liquidity, and professional support for the MSME ecosystem as a whole.
The SGF is designed to address the critical financing gap for Small and Medium Enterprises, which have a structural gap in access to equity growth capital. Existing funds provide equity support but mostly focus on early-stage enterprises and cover majorly Micro 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 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.
SMEs constitute the backbone of the Indian economy, contributing significantly to employment generation, exports, manufacturing output, and innovation. The SGF 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’s commitment to the SME Growth Fund complements its ongoing efforts to strengthen the SME sector through reforms, digitalization initiatives, credit support mechanisms, ease of doing business measures, public procurement reforms, startup promotion initiatives, and production-linked incentive programmes.
Source:
Press Information Bureau
