RAS question
The Union Cabinet approved an equity infusion of ₹5,000 crore into SIDBI to be disbursed over how many financial years?
Correct answer: (A) Three (FY26, FY27, FY28).
The Union Cabinet approved a Rs 5,000 crore equity infusion into SIDBI over three financial years: FY26, FY27 and FY28.
Explanation
The approval is spread across three financial years because the equity support is structured in three tranches. The Cabinet approved Rs 3,000 crore for Financial Year 2025-26, followed by Rs 1,000 crore each in Financial Year 2026-27 and Financial Year 2027-28, making a total infusion of Rs 5,000 crore into SIDBI. This matters because SIDBI is the apex financial institution for MSME promotion, and the infusion is meant to strengthen its capacity to raise additional resources at competitive rates and increase credit flow to MSMEs. After the infusion, the number of MSME beneficiaries expected to receive financial assistance is projected to rise from 76.26 lakh to 102 lakh.
Why the other options are wrong
- (B) Two years would cover only FY26 and FY27, but the approved tranches also include Rs 1,000 crore in FY28.
- (C) Five years is not supported because the approved infusion ends in FY28, not FY30.
- (D) Four years from FY25 to FY28 is wrong because the source starts the infusion in FY26 and lists only three tranches.
Concept
This tests government support to financial institutions and MSME credit policy, a recurring RAS economy theme. Such questions often ask candidates to track Cabinet approvals, fiscal-year phasing and the institutional role of bodies such as SIDBI.