Cabinet approves Integrated Transport Planning Authority, ₹10,000 crore SME fund

New Delhi: The Union Cabinet on Tuesday approved key measures aimed at strengthening India’s transport infrastructure, reducing logistics costs and providing patient venture capital to small and medium enterprises (SMEs) to help them scale faster and create jobs.

Cabinet approved the establishment of the Integrated Transport and Logistics Authority (ITLA) as a Special Purpose Vehicle (SPV) to support greater coordination of transport planning, project evaluation, data analysis and monitoring.

Separately, the government approved a ₹10,000 crore commitment to the SME Growth Fund (SGF), which aims to address the lack of long-term equity capital available to growth-stage SMEs. This development assumes significance as micro, small and medium enterprises (MSMEs) account for about 35.4% of India’s manufacturing industry, about 48.6% of exports and 31.1% of gross domestic product (GDP), according to the Economic Survey 2025-26. With over 74.7 million enterprises employing over 328.2 million people, the SME sector is the second largest employer in India after agriculture.

Transport push

“ITLA aims to address long-standing issues arising from fragmented planning and implementation across various transport-related ministries and agencies. By promoting better coordination and multi-modal integration through ITLA, it is expected to enhance efficiency, sustainability and effectiveness of transport infrastructure development in India,” Union Information and Broadcasting Minister Ashwini Vaishnaw said after a cabinet meeting chaired by Prime Minister Narendra Modi.

The key mandate of the office will be the preparation of the National Transport Plan with a minimum 10-year horizon. It will also evaluate the short-term and annual plans of the Departments of Transport to ensure that sector investments remain in line with the national framework and support the development of multimodal infrastructure.

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The Authority will carry out technical cost evaluations of central government infrastructure projects ₹500 crore or more, while the financial valuation will continue as per the existing mechanism. It will also monitor such projects during implementation and conduct impact assessments after their completion.

“This is a welcome and much-needed step. However, its success will ultimately depend on how effectively the plans, policies and implementation processes of individual ministries and departments are integrated with the new authority. Strong coordination and clear institutional mechanisms will be essential to ensure that the initiative achieves its intended goals,” said Amit Bhatt, India-based executive director of the International Council on Clean Transportation, a global think tank.

A key component of ITLA will be the proposed National Transportation Data Repository (NTDR). The repository will integrate data from sources such as GSTN electronic waybills, FASTags, vehicle databases, GPS-based systems and urban traffic management systems. The government expects data analysis, including analysis of cargo flow and origin and destination, to improve transport planning and project monitoring.

“Integrated transport and logistics planning can play a key role in enhancing multimodal connectivity and ensuring more efficient use of resources. As India works to reduce logistics costs as a share of GDP, the focus now needs to be on translating integrated planning into coordinated execution across modes of transport. The authority’s ability to align projects, monitor implementation and improve investment efficiency will be critical to reducing India’s logistics cost competitiveness and strengthening the transport logistics system.” Kumar Kumar Singh, partner at Deloitte India.

ITLA will also support the review and update of national logistics policy, in addition to capacity building, training, research and innovation in the transport and logistics sector.

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The government expects the institution to improve multimodal connectivity, infrastructure utilization and logistics efficiency while helping to reduce logistics costs and strengthen India’s position in global supply chains.

SME growth fund

In a separate decision, the government approved the government’s ₹10,000 crore commitment to the SME Growth Fund, which aims to catalyze growth-oriented capital for Indian SMEs across manufacturing, services, technology, innovation and strategic value chain sectors. The fund was announced in the Union Budget 2026-27.

The fund will operate through an Alternative Investment Fund (AIF) and provide growth-stage equity capital to viable and scalable SMEs. The government said existing equity-focused funds largely cater to early-stage companies and micro-enterprises, leaving a structural gap for SMEs looking to expand.

“SMEs form the backbone of the Indian economy and contribute significantly to job creation, exports, manufacturing output and innovation. While various initiatives have improved access to credit for SMEs, there remains a gap in the availability of long-term venture capital needed by businesses seeking to scale, innovate, expand internationally, adopt advanced technologies, make acquisitions and transform into industry leaders,” Vaishnaw added. The SME Growth Fund is designed to address this critical funding gap by providing equity capital to grow high-potential SME patients with proven business viability and scalability.

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The fund is designed to provide patient capital to businesses looking to expand production capacity, adopt advanced technologies, enter international markets, make acquisitions and integrate into global value chains.

“After actively contributing to the policy debate, we are particularly encouraged by this decisive intervention towards addressing the missing center in financing the growth of SMEs. Our central contention has been that promising Indian businesses need patient capital along with technology, professional management and market access to scale globally. This fund represents a significant opportunity to strengthen domestic manufacturing, reduce dependence on strategic imports and enable SMEs to become by competitive global suppliers,” said Forum, India, Ku0mar, President of India, 000mar, India, 000mar MSP.

Industry experts expect the fund to improve productivity and scale among Indian businesses while enhancing export competitiveness and creating quality jobs.

“MSMEs often face the challenge of raising growth capital on reasonable terms. In this regard, approval ₹10,000 crore corpus can make a significant difference to the sector by providing long-term capital to manufacturing businesses,” said Shrikant Goyal, managing director of Getfive Funds, an Ahmedabad-based Sebi-registered alternative investment fund targeting growth-stage SMEs. The move is also positive for private equity funds, which are constantly looking for a strong pool of institutional-ready investable businesses.”

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