The Union cabinet approved the establishment of the Integrated Transport and Logistics Authority (ITLA) and a ₹10,000 crore SME Growth Fund (SGF) on Tuesday. The ITLA will serve as a special purpose vehicle to improve coordination in transport planning, while the SGF aims to provide long-term equity capital to growth-stage small and medium enterprises (SMEs), supporting their expansion and job creation, according to livemint.com.
The ITLA is designed to address challenges caused by fragmented planning and implementation across various transport ministries and agencies. It will focus on project appraisal, data analysis, and monitoring to foster multimodal integration and enhance transport infrastructure efficiency. Meanwhile, the ₹10,000 crore SGF targets the shortage of patient risk capital for SMEs, which are critical to India's economy, as highlighted by Union minister Ashwini Vaishnaw in the report.
The SME sector contributes approximately 31.1% of India's GDP, 35.4% of manufacturing output, and 48.6% of exports, employing over 328 million people across 74.7 million enterprises. The cabinet's approval of the SGF addresses the need for growth-stage funding to help SMEs scale faster and create jobs. The ITLA's integrated approach aims to reduce logistics costs and improve transport infrastructure, which is vital for economic growth and competitiveness.
The Economic Survey 2025-26 underscores the significance of MSMEs as India's second-largest employer after agriculture. The cabinet's decision to establish ITLA and commit ₹10,000 crore to the SGF marks a concrete step toward strengthening transport infrastructure and providing critical capital to SMEs, with implementation details expected to follow in upcoming government releases.