SME Growth Fund: What the ₹10,000 Crore Cabinet Approval Means

On 6 October 2026, the Union Cabinet approved a Government of India commitment of ₹10,000 crore toward establishing the SME Growth Fund. The proposed fund is meant to provide patient growth equity to small and medium enterprises with demonstrated viability and potential to scale.

The government says most of the allocation is intended for manufacturing-focused small and medium enterprises. Firms in industrial clusters in Tier II and Tier III cities may also be considered. The fund is planned as an Alternative Investment Fund (AIF) under the SME Growth Fund framework.

Why this matters for SMEs

The announcement addresses a gap between credit support and long-term equity capital for businesses looking to expand capacity, adopt technology, enter export markets or make strategic investments. It is a Cabinet approval of a government commitment, not an announcement that individual SME applications are open or that every eligible business will receive funding.

SMEs considering equity investment can start by reviewing financial statements, growth plans and ownership implications. Application rules, selection criteria and operational details should be checked when the fund manager publishes them. Separately from this fund, small businesses that have not yet registered as MSMEs can see our Udyam registration service.

Official sources: Cabinet announcement, 6 October 2026; PIB explainer.