Pariksha SaathiCabinet Approves Rs 10,000 Crore SME Growth Fund to Create 'Future Champions' Among Small and Medium Enterprises
Meeting under Prime Minister Narendra Modi on 6 October 2026, the Union Cabinet cleared a Government of India commitment of Rs 10,000 crore to set up the SME Growth Fund (SGF). The money will go to an Alternative Investment Fund created under the SGF framework, which is to provide long-term growth equity to promising Small and Medium Enterprises in manufacturing, services, technology, innovation-led sectors and strategic value chains; most of the allocation is meant for manufacturing-focused firms, and enterprises in industrial clusters in Tier-II and Tier-III cities will also be considered. The decision carries out Para 28 of the Union Budget 2026-27, one of a group of Budget announcements on equity, liquidity and professional support for MSMEs. Explaining the need, the Government said most existing equity funds back early-stage and largely micro businesses, so established small and medium firms that want capital to scale up, adopt new technology or expand abroad face a gap in growth-stage equity — the gap the SGF is designed to close.
Drafted with AI assistance from the official PIB release linked above and checked against it by a second AI pass. Not line-edited by a human.
Learning context
Since 1 April 2025, enterprises are classified as micro, small or medium on a composite test of investment in plant and machinery or equipment and annual turnover: micro — investment up to Rs 2.5 crore and turnover up to Rs 10 crore; small — up to Rs 25 crore and Rs 100 crore; medium — up to Rs 125 crore and Rs 500 crore. Registration is done online on the Udyam portal of the Ministry of MSME.
Reference: Ministry of MSME's Udyam Registration portal (classification criteria)
Check yourself: if a small enterprise's turnover crosses Rs 100 crore while its investment stays below Rs 25 crore, does it remain 'small'?
No. Under the composite test, crossing the ceiling on either criterion moves an enterprise up to the next category (here, medium); it moves down only when it falls below the ceilings on both criteria.
Revision task: note the Budget paragraph this decision implements (Para 28 of 2026-27) and the vehicle through which the Rs 10,000 crore will flow (an Alternative Investment Fund), and keep these separate from the standing MSME thresholds above.
Test yourself
How much has the Union Cabinet committed to set up the SME Growth Fund (SGF), which will provide long-term growth equity to promising small and medium enterprises?
Show the answer
Answer: Rs 10,000 crore
The Cabinet cleared a Government of India commitment of Rs 10,000 crore, which goes to an Alternative Investment Fund set up under the SGF framework; the decision carries out Para 28 of Union Budget 2026-27 and targets the growth-stage equity gap for established small and medium firms.
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