New Delhi, Oct. 12 -- The Union Cabinet's approval of a Rs.10,000 crore SME Growth Fund is among the most consequential recent initiatives for India's enterprise ecosystem. At a time when SMEs are navigating an uncertain global environment, the fund provides an important source of growth capital.

The importance of this intervention becomes evident when viewed against the central role that micro, small and medium enterprises (MSMEs) play in the economy.

The sector contributes around 35.4% of manufacturing output, 48.6% of exports and 31.1% of gross domestic product, making it one of the most important drivers of growth, employment and entrepreneurship in the country.

Within the broader MSME ecosystem, SMEs constitute the segment with th...