Cabinet Approves Rs 10,000 Crore SME Growth Fund for Equity Investments

New Delhi, Oct 6 (KNN) The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a government commitment of Rs 10,000 crore to establish the SME Growth Fund (SGF), which will provide direct equity investments to small and medium enterprises (SMEs).

The fund, announced in the Union Budget 2026-27, aims to address the gap in growth-stage equity financing, as existing funds largely support early-stage businesses and micro enterprises.

The government will commit Rs 10,000 crore to an Alternative Investment Fund (AIF) established under the SGF framework. A majority of the fund's allocation will go to manufacturing-focused SMEs, including enterprises operating in industrial clusters in Tier-II and Tier-III cities.

The fund will provide long-term growth capital to viable SMEs to expand capacity, adopt advanced technologies, scale operations, enter international markets and integrate into global value chains. It is also intended to support strategic investments and acquisitions.

The initiative is expected to help manufacturing and other high-potential SMEs improve productivity, strengthen export competitiveness and generate employment. It complements existing government measures for the sector, including credit support, digitalisation, public procurement reforms and production-linked incentive programmes.

(KNN Bureau)