SME Growth Fund: Cabinet clears ₹10,000 crore commitment
Why in the news
On 6 October 2026, the Union Cabinet chaired by Prime Minister Narendra Modi cleared a government commitment of ₹10,000 crore for the SME Growth Fund (SGF), a Budget 2026-27 promise.
Key facts
- Corpus commitment: an aggregate ₹10,000 crore from the Government of India.
- Structure: the money goes to an Alternative Investment Fund (AIF) created under the SGF framework, which will provide equity capital.
- Problem addressed: a structural shortage of equity finance for SMEs that want to scale up.
- Beneficiaries: small and medium enterprises with proven viability and scalability; micro enterprises are not the focus.
- Priority: the larger share is meant for manufacturing SMEs, with attention to units in industrial clusters of Tier-II and Tier-III cities.
- Budget link: announced under Para 28 of Union Budget 2026-27 as part of a wider MSME package.
| Feature | Detail |
|---|---|
| Approved by | Union Cabinet |
| Date | 6 October 2026 |
| Commitment | ₹10,000 crore |
| Vehicle | Alternative Investment Fund |
| Sectors | Manufacturing, services, technology, innovation |
About the SME Growth Fund
The fund aims to channel growth capital so that promising SMEs can grow into champions in manufacturing, services, technology and innovation. Supported firms are expected to expand operations, adopt technology, go international and join global value chains, which should boost jobs and export competitiveness.
Exam angle
- Remember the figure: ₹10,000 crore, routed through an AIF.
- Focus is small and medium firms, mainly manufacturing, in Tier-II/III clusters.
- Source of the idea: Para 28 of Union Budget 2026-27.