Cabinet approves ₹10,000 crore commitment for SME Growth Fund to provide equity capital to Small and Medium Enterprises
On 6 October 2026, the Union Cabinet approved the Centre's ₹10,000 crore commitment to the SME Growth Fund (SGF), an Alternative Investment Fund for direct growth-equity investment in Small and Medium Enterprises, announced in Para 28 of Union Budget 2026-27.
Summary
The Union Cabinet chaired by Prime Minister Narendra Modi on 6 October 2026 approved a Government of India commitment of ₹10,000 crore towards the SME Growth Fund (SGF). Announced in Para 28 of the Union Budget 2026-27, the fund will give patient growth equity to high-potential Small and Medium Enterprises, filling a gap left by existing equity funds that mostly back early-stage and micro enterprises. The ₹10,000 crore will go to an Alternative Investment Fund (AIF) set up under the SGF framework, with the majority of allocation for manufacturing-focused SMEs and attention to industrial clusters in Tier-II and Tier-III cities.
Key facts
- Decision
- Union Cabinet, 6 October 2026
- Fund
- SME Growth Fund (SGF)
- Government commitment
- ₹10,000 crore
- Vehicle
- Alternative Investment Fund (AIF) under the SGF framework
- Budget link
- Para 28, Union Budget 2026-27
- Type of support
- Direct, long-term growth equity
- Priority
- Majority allocation to small and medium manufacturing enterprises
- Regional focus
- Industrial clusters in Tier-II and Tier-III cities
Practice MCQs 4 questions
In October 2026, the Union Cabinet approved what amount as the Government's commitment to the SME Growth Fund?
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Correct answer: D — ₹10,000 crore
The Government's ₹10,000 crore commitment under the SME Growth Fund will be made to which type of investment vehicle?
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Correct answer: A — An Alternative Investment Fund (AIF)
Under the SME Growth Fund approved in October 2026, the majority of the allocation will go to:
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Correct answer: D — Small and medium manufacturing-focused enterprises
Consider the following statements about the SME Growth Fund (SGF): 1. The SGF was announced in the Union Budget 2026-27. 2. According to the Government, existing equity funds mostly focus on early-stage and micro enterprises, leaving a gap in growth capital for Small and Medium Enterprises. Which of the statements given above is/are correct?
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Correct answer: C — Both 1 and 2