Kashmir Impulse Desk
New Delhi, Oct 06
India’s Union Cabinet on Tuesday approved a government commitment of Rs 10,000 crore to establish a Small and Medium Enterprise Growth Fund aimed at providing equity capital to businesses seeking to expand.
The fund is part of measures announced in the Union Budget for 2026-27 to strengthen the micro, small and medium enterprise sector through equity, liquidity and professional support.
The government said existing funds largely focus on early-stage businesses and micro enterprises, leaving a gap in growth-stage equity financing for small and medium enterprises.
The new fund will target growth-oriented firms in manufacturing, services, technology, innovation-driven sectors and strategic value chains.
It will provide what the government described as “patient growth equity capital” to businesses with demonstrated viability and potential to scale.
A majority of the allocation will go to manufacturing-focused enterprises, while industrial clusters in Tier-II and Tier-III cities will also be considered.
The government said the funding would help firms expand capacity, adopt new technologies, enter overseas markets, integrate into global supply chains and undertake acquisitions and other strategic investments.
The initiative is intended to create a pipeline of Indian companies with the scale and competitiveness to become leaders in their sectors.
Under the scheme, the government will commit Rs 10,000 crore to an Alternative Investment Fund established under the SME Growth Fund framework.
The fund will complement existing government measures covering digitalisation, credit support, ease of doing business, public procurement, startup promotion and production-linked incentives.
The government said investments in industrial clusters outside major cities could strengthen local supply chains and create jobs.
The initiative is part of a broader effort to deepen domestic capital markets for growth-stage businesses and support the government’s Viksit Bharat 2047 agenda.
