New Delhi, October 6 (Daily Kiran) : The Indian Cabinet, chaired by Prime Minister Narendra Modi, has approved the establishment of a ₹10,000 crore SME Growth Fund (SGF) aimed at enhancing growth-oriented capital for small and medium enterprises (SMEs). This initiative is designed to support the expansion of outstanding Indian businesses in manufacturing, services, technology, and innovation-based sectors, as well as strategic value chains.
This decision is part of the broader announcements made in the 2026-27 central budget, which seeks to provide equity, liquidity, and professional support across the entire MSME ecosystem.
According to a statement from the Cabinet, while several funds offer equity support, most focus on early-stage and very small enterprises. There has been a structural gap in equity growth capital for SMEs.
The statement further emphasized that this significant initiative reflects the government’s commitment to realizing the ‘Developed India 2047’ vision. It aims to strengthen India’s entrepreneurship ecosystem, enhance domestic capital markets for growth-stage companies, and foster a new generation of Indian firms capable of competing on a global scale.
SMEs are considered the backbone of the Indian economy, playing a crucial role in job creation, exports, manufacturing output, and innovation. Despite various initiatives making credit more accessible to MSMEs, there remains a shortage of long-term risk capital for companies looking to expand, innovate, adopt new technologies, acquire other businesses, and become industry leaders.
The government has stated that the SME Growth Fund is specifically designed to address this critical financing gap. It will provide “patient growth equity capital” to promising SMEs that have demonstrated successful business models and growth potential.
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