New Delhi, Oct 06: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Monday approved the government’s commitment of Rs 10,000 crore towards establishing the SME Growth Fund (SGF) to provide growth capital to small and medium enterprises and help create Indian companies capable of competing globally.
The initiative, announced as part of the Union Budget 2026-27, seeks to address the structural gap in growth-stage equity financing available to SMEs, particularly those looking to scale operations, adopt advanced technologies, expand internationally and integrate into global value chains.
Under the scheme, the government will provide an aggregate commitment of Rs 10,000 crore to an Alternative Investment Fund (AIF) established under the SGF framework.
The fund will focus primarily on small and medium manufacturing enterprises, while also considering SMEs operating in industrial clusters in Tier-II and Tier-III cities.
The government said the fund is designed to provide patient, long-term equity capital to high-potential SMEs with demonstrated business viability and scalability.
The initiative is expected to help enterprises expand capacity, improve productivity, adopt new technologies, enter international markets and undertake strategic investments, thereby strengthening their competitiveness and export potential.
The government said the SGF would complement existing measures aimed at strengthening the SME ecosystem, including credit support, digitalisation, ease of doing business reforms, public procurement measures, startup promotion and production-linked incentive programmes.
The initiative is also expected to support balanced regional industrial development, strengthen local supply chains and generate quality employment, particularly through investments in industrial clusters in Tier-II and Tier-III cities.
The government said the fund would help foster a new generation of competitive Indian enterprises and contribute to the vision of Viksit Bharat @ 2047.
