₹10,000 Crore Growth Fund for Small and Medium Enterprises Gets Cabinet Approval

The Union Cabinet has approved a ₹10,000 crore Growth Fund aimed at strengthening small and medium enterprises and supporting their expansion across India’s manufacturing sector.

The fund was approved at a Cabinet meeting chaired by Prime Minister Narendra Modi in New Delhi. The initiative was announced in the Union Budget for the current financial year and is intended to address the equity funding gap faced by small and medium businesses.

According to Information and Broadcasting Minister Ashwini Vaishnaw, the fund will focus on businesses involved in manufacturing and is expected to support investments in production, services, technology and innovation. It will also seek to encourage the emergence of Indian companies capable of competing in strategic value chains.

The Ministry of Micro, Small and Medium Enterprises and the Ministry of Finance will jointly operate the fund.

The government already has an equity-support mechanism for businesses in this segment, but its focus has largely been on micro enterprises. The new Growth Fund is intended to strengthen equity access for small and medium enterprises, particularly those with growth potential in manufacturing.

A key feature of the initiative is its focus beyond major industrial centres. Investments will also be directed towards businesses located in tier-two and tier-three cities, with the government expecting this to support more balanced industrial development.

The move comes at a time when manufacturers are facing increasing pressure to expand production capacity, adopt new technologies and improve their position in domestic and international markets. Access to equity capital can be particularly important for businesses looking to scale without relying heavily on debt.

The government expects small and medium enterprises to play a significant role in employment generation, exports and manufacturing growth. By directing capital towards growth-oriented companies, the new fund could help businesses strengthen their production capabilities and participate more effectively in larger supply chains.

The ₹10,000 crore allocation therefore represents a broader push to deepen India’s manufacturing base while improving access to growth capital for businesses outside the country’s traditional industrial hubs.