Cabinet Clears Rs 10,000 Crore SME Growth Fund and a New Transport Planning Authority

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Tuesday approved two structural measures aimed at India's industrial base: a Rs 10,000 crore government commitment to an SME Growth Fund, and the creation of a new apex body to plan and monitor the country's transport infrastructure.

Filling the growth-capital gap

The SME Growth Fund was first announced in the Union Budget 2026-27. It will make direct equity investments in small and medium enterprises that have viable businesses and the potential to scale. The government's money will be committed to an Alternative Investment Fund set up under the SME Growth Fund framework.

The reasoning is a familiar complaint among Indian business owners. Existing government-backed equity schemes mostly target early-stage ventures and micro enterprises, which leaves a gap for companies that have survived the startup phase and now need patient capital to expand. Bank credit is easier to access than it once was, but debt is a poor fit for a firm that wants to build a new plant, buy technology, or acquire a competitor without loading its balance sheet.

According to the Cabinet, the fund will give these companies growth equity at critical points so they can expand capacity, upgrade technology, enter export markets, integrate into global supply chains and pursue acquisitions.

Manufacturing and smaller cities first

A majority of the fund's allocation will go to manufacturing-focused SMEs. It will also look at firms operating in industrial clusters in Tier-II and Tier-III cities, an attempt to spread investment beyond the major metros and strengthen local supply chains and employment.

The government framed the scheme as a way to create Indian companies with the scale and competitiveness to lead their sectors globally. It sits alongside other MSME measures already in place, including credit guarantees, public procurement preferences, digitalisation support and production-linked incentive schemes.

How much private capital the fund can crowd in, and how quickly it can deploy money, will determine its real impact. A Rs 10,000 crore anchor is significant, but the SME universe is vast, so selection will matter.

A single brain for transport planning

The second major decision is the Integrated Transport and Logistics Authority, or ITLA. Union Minister Ashwini Vaishnaw said at the Cabinet briefing that the body will be responsible for long-term master plans covering 10, 15 or even 30 years.

ITLA will prepare a national transport plan spanning roads, railways, ports and shipping, civil aviation, inland waterways, coastal shipping, urban mobility and logistics. It will also review the shorter five-year and annual plans of individual transport ministries to make sure they line up with the national master plan and support multi-modal connectivity.

Crucially for project execution, the authority will carry out technical appraisal of government infrastructure projects costing Rs 500 crore or more, while financial appraisal stays with existing mechanisms. It will also monitor the implementation of those projects, provide a mechanism to resolve bottlenecks, and assess their impact after completion.

India's transport networks have long been planned in silos, with highways, railways and ports often built on separate timelines. ITLA is meant to address that coordination problem and bring logistics costs down.

Rail projects also cleared

Separately, the Cabinet Committee on Economic Affairs approved four railway multitracking projects worth about Rs 11,169 crore across six states: Maharashtra, Madhya Pradesh, West Bengal, Bihar, Odisha and Jharkhand. They include a fourth line between Itarsi and Nagpur, doubling of the Chhatrapati Sambhajinagar-Parbhani section, third and fourth lines between Aluabari Road and New Jalpaiguri, and third and fourth lines between Dangoaposi and Jaroli.

This is an original summary based on public reporting. See our editorial policy for how we source, write, and correct our stories.