New Delhi: The Union cabinet on Tuesday approved key measures aimed at strengthening India’s transport infrastructure, reducing logistics costs and providing patient risk capital to small and medium enterprises (SMEs) to help them scale faster and create jobs.
The cabinet approved the establishment of the Integrated Transport and Logistics Authority (ITLA) as a special purpose vehicle (SPV) to foster greater coordination for transport planning, project appraisal, data analysis and monitoring.
Separately, the government approved a ₹10,000-crore commitment to the SME Growth Fund (SGF), aimed at addressing the shortage long-term equity capital available to growth-stage SMEs. The development assumes significance as micro, small, and medium enterprises () account for around 35.4% of India’s manufacturing, around 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 MSME sector is India’s second-largest employer after agriculture.
“ITLA aims to address long-standing challenges arising from fragmented planning and implementation across various transport-related ministries and agencies. By fostering better coordination and multimodal integration through ITLA, it is expected to enhance the efficiency, sustainability, and effectiveness of transport infrastructure development in India,” Union minister for information and broadcasting said after the cabinet meeting, chaired by prime minister Narendra Modi.
A key mandate of the authority will be to prepare a National Transport Master Plan with an at least 10-year horizon. It will also evaluate short-term and annual plans of transport ministries to ensure that sectoral investments remain aligned with the national framework and encourage multimodal infrastructure development.
The authority will undertake technical evaluation of central government infrastructure projects costing ₹500 crore or more, while financial appraisal will continue under the existing mechanism. It will also monitor such projects during implementation and conduct post-completion impact assessments.
“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 critical to ensure that the initiative delivers on its intended objectives,” said Amit Bhatt, India managing director of the global think-tank International Council on Clean Transportation.
A key component of ITLA will be the proposed National Transport Data Repository (NTDR). The repository will integrate data from sources such as GSTN e-way bills, FASTags, vehicle databases, GPS-based systems and urban traffic management systems. The government expects data analytics, including freight-flow and origin-destination analysis, to improve transport planning and project monitoring.
“Integrated transport and logistics planning can play a critical role in strengthening multimodal connectivity and ensuring more efficient utilisation of resources. With India working towards reducing logistics costs as a share of GDP, the focus now must be on translating integrated planning into coordinated execution across transport modes. The Authority’s ability to align projects, monitor implementation and improve investment efficiency will be critical to reducing logistics costs and strengthening the competitiveness of India’s transport and logistics ecosystem,” said Kushal Kumar Singh, partner at Deloitte India.
ITLA will also support the review and updating of the National Logistics Policy, besides undertaking capacity building, training, research and innovation in the transport and logistics sectors.
The government expects the institution to improve multimodal connectivity, infrastructure utilisation and logistics efficiency while helping reduce logistics costs and strengthen India’s position in global supply chains.
In a separate decision, the Cabinet approved the government’s ₹10,000 crore commitment to the SME Growth Fund, aimed at catalysing growth-oriented capital for India’s small and medium enterprises across manufacturing, services, technology, innovation-driven, and strategic value chains sectors. The fund was announced in the Union budget 2026-27.
The fund will operate through an (AIF) and will 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 small and medium businesses looking to scale.
“SMEs constitute the backbone of the Indian economy, contributing significantly to employment generation, exports, manufacturing output, and innovation. While various initiatives have enhanced access to credit for SMEs, a gap remains in the availability of long-term risk capital required by enterprises seeking to scale, innovate, expand internationally, adopt advanced technologies, undertake acquisitions, and transform into industry leaders,” added Vaishnaw. The SME Growth Fund is designed to address this critical financing gap by providing patient growth equity capital to high-potential SMEs with demonstrated business viability and scalability.
The fund is designed to provide patient capital to businesses seeking to expand manufacturing capacity, adopt advanced technologies, enter international markets, undertake acquisitions and integrate into global value chains.
“Having actively contributed in the policy discussions, we are particularly encouraged by this decisive intervention towards addressing the missing middle in SME growth financing. Our central submission has been that promising Indian enterprises need patient equity capital, alongside technology, professional management and market access, to achieve global scale. This fund presents a significant opportunity to strengthen domestic manufacturing, reduce strategic import dependence, and enable SMEs to become competitive global suppliers,” said Vinod Kumar, president, India SME Forum, which represents around 100,000 SMEs.
Industry experts expect the fund to improve productivity and scale among Indian enterprises while strengthening export competitiveness and creating quality employment.
“MSMEs often face the challenge of raising growth capital on reasonable terms. In this context, the approval of the ₹10,000 crore corpus can make a meaningful difference for the sector by providing long-term equity to manufacturing businesses,” said Shrikant Goyal, managing director, Getfive Funds, an Ahmedabad-based Sebi-registered alternative investment fund focused on growth-stage SMEs. “It can also help build a stronger ecosystem, improve governance and reporting standards, and bring more professional investors into a segment that has been undercapitalised for too long. The move is also positive for private funds, which are constantly looking for a strong pipeline of investable, institution-ready businesses.”
