The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved an equity support of Rs 5,000 crore to the Small Industries Development Bank of India (SIDBI) to strengthen credit flow to the MSME sector.

The capital infusion will be made by the Department of Financial Services (DFS) in three tranches. Of the total amount, Rs 3,000 crore will be infused in FY2025–26 at a book value of Rs 568.65 per share as on March 31, 2025, while the remaining Rs 1,000 crore each will be infused in FY2026–27 and FY2027–28 at the book value as of March 31 of the respective preceding financial years.

Following the equity infusion, the number of MSMEs receiving financial assistance from SIDBI is expected to rise from 76.26 lakh at the end of FY2025 to around 102 lakh by FY2028, adding approximately 25.74 lakh new MSME beneficiaries.

Based on official MSME data as of September 30, 2025, which shows employment generation of 4.37 persons per MSME, the government estimates that the additional MSME support could lead to the creation of around 1.12 crore jobs by the end of FY2027–28.