NEW DELHI | NATIONAL POLICY | 6 OCTOBER 2026
The Union Cabinet approved a ₹10,000 crore government commitment to establish an SME Growth Fund on 6 October. The fund is designed to provide direct equity investment to small and medium enterprises that have viable businesses and room to expand, with a strong emphasis on manufacturing.
Why equity matters
Many public programmes help small businesses obtain loans. Equity takes a different form: an investor supplies capital for an ownership stake, sharing in the company’s future risk and returns. The government said existing funds often focus on early-stage or micro firms, leaving a gap for established small and medium enterprises seeking longer-term growth capital.
The Cabinet envisages a commitment to an alternative investment fund under the SME Growth Fund framework. The majority of allocations are intended for manufacturing-focused enterprises, while the fund may also consider firms in industrial clusters in smaller cities. Potential uses include expanding capacity, adopting technology and reaching export markets.
What remains to be seen
The Cabinet’s ₹10,000 crore commitment is a proposed public investment envelope; it is not a grant available to every small business. The operating rules, selection standards, private capital participation and investment decisions will determine which firms receive support. Performance should be assessed through actual investments and outcomes rather than announcements alone.
This report reflects the approval and explanatory factsheet issued on 6 October 2026.
Sources and image
Sources: Press Information Bureau, Cabinet release, 6 October 2026; PIB factsheet.
Image source
Textile production in Tirupur. Archive manufacturing photograph; not a recipient of the SME Growth Fund. Photo: Fabrics for Freedom / Wikimedia Commons · CC BY 2.0. Display crops may be applied.
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