The Union Cabinet is likely to consider a proposal for a Rs 10,000 crore SME Growth Fund at its meeting on Tuesday, October 6, sources told NDTV Profit. The proposal is aimed at helping small and medium enterprises expand their business.
In February, Finance Minister Nirmala Sitharaman announced the dedicated fund in the Union Budget 2026-27 to provide equity support and risk capital to promising enterprises. The initiative aims to create future champions by incentivising businesses based on select criteria.
The proposed fund forms part of a broader package covering capital, liquidity and professional support for smaller businesses. Cabinet consideration would mark the next step towards implementing the Budget proposal.
Alongside the SME Growth Fund, Sitharaman proposed adding Rs 2,000 crore to the Self-Reliant India Fund, established in 2021. The additional allocation is intended to continue supporting micro-enterprises and maintain their access to risk capital.
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Union Budget 2026-27's Proposal On SME Growth Fund
The Budget also proposed reviving 200 legacy industrial clusters, supporting smaller businesses operating in traditional industries and manufacturing.
On liquidity, Sitharaman said more than Rs 7 lakh crore had been made available to micro, small and medium enterprises through the Trade Receivables Discounting System, or TReDS.
Sitharaman proposed making TReDS the mandatory settlement platform for all purchases by central public sector enterprises from MSMEs. The move would also serve as a benchmark for other corporate buyers. A second proposal would introduce credit guarantee support through the Credit Guarantee Fund Trust for Micro and Small Enterprises for invoice discounting on TReDS.
The government also proposed linking the Government e-Marketplace with TReDS to share information with financiers about government purchases from MSMEs, encouraging cheaper and quicker financing. Another measure would introduce TReDS receivables as asset-backed securities to help develop a secondary market and improve liquidity and transaction settlement.
For professional support, the government plans to facilitate institutions including ICAI, ICSI and ICMAI in designing short-term modular courses and practical tools for a cadre of accredited "Corporate Mitras."
These para-professionals, particularly in Tier-II and Tier-III towns, would help MSMEs meet compliance requirements at affordable costs, complementing the Budget's proposed capital and liquidity measures for enterprises seeking to expand their operations and access financing.
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