Nirmala Sitharaman Announces Rs 10,000 Crore SME Growth Fund

The Union Cabinet is likely to take up two proposals linked to the government’s growth and infrastructure priorities. This includes the setting up of an Integrated Transport and Logistics Authority and the Rs 10,000 crore SME Growth Fund announced in the Union Budget 2026-27.

The SME (Small and Medium-Sized Enterprises) Growth Fund was announced by finance minister Nirmala Sitharaman as part of the government’s plan to strengthen the micro, small and medium enterprise (MSME) sector and help businesses emerge as future “Champions”.

The newly unveiled fund is designed to offer financial backing to businesses, with rewards tied to specific performance benchmarks. The initiative, championed by Finance Minister Sitharaman, builds on the government's 'kartavya' agenda, a three-pronged strategy aimed at boosting productivity, competitiveness, and global resilience.

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As part of its ongoing efforts to bolster the Self-Reliant India Fund, the government has announced a further injection of Rs 2,000 crore. Established in 2021, the fund aims to sustain support for micro enterprises, ensuring they continue to secure access to vital risk capital.

As part of its efforts to bolster liquidity for small and medium-sized enterprises, the government has made over Rs 7 lakh crore available through the Trade Receivables Discounting System (TReDS). Sitharaman's plan involves leveraging TReDS as the primary platform for transactions between central public sector enterprises and MSMEs.

Additionally, a credit guarantee mechanism via the Centre for Government Trade and Manufacturing Services Enterprise (CGTMSE) will be introduced to facilitate invoice discounting on the platform. Meanwhile, a link between the Government E-Marketplace (GeM) and TReDS will enable the sharing of government purchase information with financiers.

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The government has floated a plan to convert TReDS receivables into asset-backed securities. A move aimed at bolstering the development of a secondary market and enhancing the efficiency of transaction settlement and liquidity.

Sitharaman, while presenting the Budget, said that the Centre, “decisively and consistently chose action over ambivalence, reform over rhetoric and people over populism”.

She said the government was guided by three ‘kartavya’, with the first focused on accelerating and sustaining economic growth.