New Delhi: Prime Minister Narendra Modi said on Tuesday that the Cabinet’s approval for the Rs 10,000 crore SME Growth Fund is a big boost for the MSME sector and represents a major step towards creating the next generation of Indian business leaders.
“The fund offers the platform for SMEs to scale up, adopt advanced technologies, expand manufacturing, enter global markets and integrate with global value chains,” PM Modi said in a post on X.
Most of the allocation from the fund will be made towards small and medium manufacturing-focused enterprises. The fund will also consider SME’s operating in industrial clusters in Tier II and Tier III cities.
By providing long-term capital, the initiative will enable Indian SMEs to scale operations, invest in technology and manufacturing capacity, expand into international markets, integrate into global value chains, and undertake strategic investments. The government expects the Fund to accelerate the emergence of a strong pipeline of Indian companies with the scale, innovation capability, and competitiveness required to become champions in their respective sectors, according to an official statement.
SMEs constitute the backbone of the Indian economy, contributing significantly to employment generation, exports, manufacturing output, and innovation. While various initiatives have enhanced access to credit for SMEs, a gap remains in the availability of long-term risk capital required by enterprises seeking to scale, innovate, expand internationally, adopt advanced technologies, undertake acquisitions, and transform into industry leaders. The SME Growth Fund is designed to address this critical financing gap by providing patient growth equity capital to high-potential SMEs with demonstrated business viability and scalability, the statement explained.
Under the initiative, the Government of India will provide an aggregate commitment of Rs10,000 crore to the Alternative Investment Fund (AIF) established under the SME Growth Fund framework. By enabling manufacturing enterprises to expand capacity, adopt advanced technologies and achieve greater scale, the SGF is expected to improve scale, productivity, and strengthen export competitiveness. Investments across industrial clusters, including those in Tier-II and Tier-III cities, will support balanced regional industrial development, reinforce local supply chains and generate high-quality employment opportunities.
(IANS)
