New Delhi, Oct. 6 -- The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a government commitment of Rs 10,000 crore to establish the SME Growth Fund (SGF), which will provide direct equity investments to small and medium enterprises (SMEs).

The fund, announced in the Union Budget 2026-27, aims to address the gap in growth-stage equity financing, as existing funds largely support early-stage businesses and micro enterprises.

The government will commit Rs 10,000 crore to an Alternative Investment Fund (AIF) established under the SGF framework. A majority of the fund's allocation will go to manufacturing-focused SMEs, including enterprises operating in industrial clusters in Tier-II and Tier-III cities.

The fund will ...