The Union Cabinet approved a ₹5,000 crore equity infusion into the Small Industries Development Bank of India (SIDBI) on January 21, 2026. The fund will help increase credit availability for micro, small and medium enterprises (MSMEs). The Department of Financial Services (DFS) will release the amount in three phases. First, ₹3,000 crore will be infused in 2025-26 at a book value of ₹568.65 on March 31, 2025. Then, ₹1,000 crore each will follow in 2026-27 and 2027-28 at the book value of the previous financial year. The government said that after this infusion, the number of MSMEs receiving financial assistance will rise from 76.26 lakh in 2025 to roughly 102 lakh by 2027-28. This means about 25.74 lakh new MSMEs will get support. As of September 30, 2025, almost 6.9 crore MSMEs are registered, employing about 30.16 crore people—an average of 4.37 employees per enterprise. Based on this, the new beneficiaries could generate around 1.12 crore new jobs by 2027-28. The capital boost is also needed to keep SIDBI’s Capital to Risk-Weighted Assets Ratio (CRAR) strong, as lending to MSMEs increases. The government said, "A healthy CRAR, well above the mandated level, is a key to protecting credit ratings." Maintaining this ratio will help SIDBI raise resources at fair interest rates and pass on cheaper credit to MSMEs. This move aims to help MSMEs grow and create jobs at competitive costs.