The Ministry of Micro, Small and Medium Enterprises (MSME) launched the Scheme of Fund for Regeneration of Traditional Industries (SFURTI) in 2005 to promote cluster development of traditional industries and artisans. As per the revised guidelines of SFURTI as of 02.03.2020, the following schemes are merged into the SFURTI:
- The Scheme for Enhancing Productivity and Competitiveness of Khadi Industry and Artisans.
- The Scheme for Product Development, Design Intervention and Packaging (PRODIP).
- The Scheme for Rural Industries Service Centre (RISC).
- Other small interventions such as Ready to Wear Mission, Ready Warp Units, etc.
Objectives of SFURTI
- To organise artisans and traditional industries into clusters and support their long-term sustainability and make them competitive.
- To provide sustained employment for rural entrepreneurs and traditional industry artisans.
- To increase the marketability of products of clusters by supporting their new design intervention, products, improved packaging, and marketing infrastructure.
- To equip the traditional artisans of the respective clusters with improved capabilities and skills through exposure visits and training.
- To provide common facilities and improved equipment and tools for artisans to promote optimum utilisation of infrastructure facilities.
- To strengthen the respective cluster governance system through active participation of the stakeholders to gauge the challenges and opportunities and respond coherently.
- To build up traditional and innovative skills, advanced processes, improved technologies, market intelligence and new models of PPP (Public-Private Partnerships).
- To set up a multi-product cluster with a solid market-driven approach and integrated value chain for long term sustainability and viability of the cluster.
- To ensure convergence of every activity of the cluster formation and operations.
- To understand and identify the cluster’s target customers, understand their aspirations and needs, develop and present product lines to meet the requirement.
- To develop specific product lines based on the target consumer segment of the currently diversified basket of heterogeneous products.
- To shift from a supply-driven selling model to a market-driven model with the right focus, product mix, branding, correct positioning, and right pricing so that the offering is optimal for each focus category.
- To tap the e-commerce marketing channel to reach and grow e-commerce market penetration and devise a strategy to make its presence in the e-retail space.
- To make a substantial investment in the area of quality improvement and product design.
Assistance Provided Under SFURTI
The government provides financial assistance for a specific project depending on the cluster, up to a maximum of Rs.5 crore as per the revised guidelines. The assistance provided is as follows:
|Type of Cluster||Per Cluster Budget|
|Regular Cluster (up to 500 artisans)||Up to Rs.2.50 crore|
|Major Cluster (more than 500 artisans)||Up to Rs.5 crore|
Who Can Apply for Cluster Development Under SFURTI?
The Implementing Agencies (IAs) can apply for the proposal for cluster development to the Nodal Agencies (NAs). The following entities can be the IAs who can apply for cluster development under the SFURTI:
- Non-Government Organisations (NGOs).
- Field functionaries of Central and State Government.
- Panchayati Raj Institutions (PRIs).
- Institutions of the State and Central Government and semi-government institutions.
- Private sector by forming cluster-specific Special Purpose Vehicles (SPVs).
- Corporates and Corporate Social Responsibility (CSR) foundations having the expertise to undertake cluster development.
Application for SFURTI
IAs should submit the proposals for setting up clusters under the scheme to any Nodal Agencies (Khadi and Village Industries Commission and other Nodal Agencies appointed by MSME) listed under the scheme. The IAs can submit their proposal for cluster development to the respective NA offices, and the same is scrutinised at the state and zonal level before submitting the proposal to the Scheme Steering Committee (SCC) for approval.
Implementation of SFURTI
- Web-Based Project Management System (PMS)
In order to effectively manage the scheme, a dedicated SFURTI website is set up. This website is enabled with Project Management System (PMS) to manage ongoing projects, invite proposals, screening applications and concurrent monitoring of progress till project completion.
- Identification of a tentative list of clusters
The Nodal Agencies (NAs) will draw up a state-wise list of potential clusters in consultation with the Technical Agencies (TAs). The NA will identify the Implementing Agency that will be the local operative to manage the clusters and look after their day-to-day affairs.
- Engagement and appointment of Technical Agencies (TAs)
The Technical Agencies are established national-level institutions with expertise in small enterprise and artisanal cluster development. The TAs are engaged to provide implementation support and close hand-holding to the clusters. They shall also provide technical support to the IAs and NAs.
- Approval from Scheme Steering Committee (SSC)
The Scheme Steering Committee (SSC) will review the proposals of clusters and the respective IAs for the clusters submitted by the NAs. After reviewing, the SCC will give its approval to the cluster proposals.
- Pre-requisites for release of funds
NAs will submit the proposal for the release of funds cluster-wise to the Ministry of MSME. The release of funds to the NAs is based on the approved Plan of Action (PoA) and the progress of expenditure.
- Release of funds to Nodal Agencies (NAs)
The funds are released to the NAs on receipt of Utilization Certificates (UC) and progress reports by the IAs. After the release of funds, the NAs will release the fund to the cluster as per the approved annual action plan or cluster.
- Release of funds to Implementing Agency (IA)
On obtaining the final approval, the NA will issue a sanction order. The NA will release the first instalment for the hard intervention in the bank account opened in the name of the IA. The release of funds by NAs to the IAs for soft intervention will be need-based. The part component of the fund is released to the IA after the in-principle approval of the SSC.
Project Interventions Under SFURTI
The SFURTI scheme covers three types of interventions, i.e. soft interventions, hard interventions and thematic interventions.
The soft interventions under the project consist of the following activities:
- General awareness, motivation, counselling, and trust-building.
- Capacity building and skill development for the entire value chain.
- Exposure visits.
- Institution development.
- Product and design development.
- Market promotion initiatives.
- Participation in training programmes, workshops and seminars on technology up-gradation, etc.
The hard interventions include the creation of the following facilities:
- Multiple facilities for packaging and multiple products wherever needed.
- Raw Material Banks (RMBs).
- Common Facility Centres (CFCs).
- Tools and technological up-gradation such as tool-kit distribution, charkha up-gradation, etc.
- Up-gradation of production infrastructure.
- Training centre.
- Warehousing facility.
- Value addition and processing centre/multi-products.
The SFURTI scheme also supports cross-cutting thematic interventions at the sector level, emphasising domestic and international markets. They will primarily include:
- Promotion and brand building campaign.
- E-commerce initiatives.
- New media marketing.
- Development and research initiatives.
- Developing institutional linkages with the existing and proposed clusters.
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