The Union Cabinet has approved a Rs 10,000 crore SME Growth Fund to make direct equity investments in growth-stage small and medium enterprises.

According to the government, the fund will identify and support "Champion SMEs" with patient capital, helping them scale up operations. It is part of a wider push to boost private sector confidence and strengthen India's manufacturing and services base.

The fund sits alongside other recent measures for smaller firms. A government document notes that the Self-Reliant India Fund has received an additional Rs 2,000 crore for micro enterprises, and professional bodies will train corporate mentors in tier-II and tier-III towns to support businesses.

Small and medium enterprises employ crores of people across India but often struggle to raise growth capital from banks or markets. Equity funding of this kind can help promising firms expand without taking on heavy debt. The government has said the fund will focus on enterprises with strong growth potential in sectors linked to manufacturing, exports and domestic supply chains.