INDUSTRY
Cabinet clears Rs 10,000-crore equity funding for SMEs to scale up
- IBJ Bureau
- Oct 07, 2026
The Union Cabinet has approved a Rs 10,000-crore SME Growth Fund (SGF) to provide long-term equity funding to small and medium enterprises (SMEs) in manufacturing, technology, services, and innovation sectors.
The Cabinet, chaired by Prime Minister Narendra Modi, has cleared the initiative announced in the Union Budget 2026-27 as a part of the government’s three-pronged strategy of creating champion MSMEs.
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 provide patient growth equity capital to high-potential SMEs with demonstrated business viability and scalability.
Manufacturing-focused businesses will receive the largest share of the SGF.
The fund will also consider enterprises operating in industrial clusters in tier-II and tier-III cities.
The fund seeks to bridge a shortage of growth capital for SMEs with demonstrated business viability and the ability to scale.
Beyond capacity expansion, the scheme aims to help businesses integrate into global value chains and improve export competitiveness.
The government expects the investments to generate jobs and strengthen local supply chains.
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