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 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 |
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:
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.
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.
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.
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.
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.
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.
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.
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.
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:
The hard interventions include the creation of the following facilities:
The SFURTI scheme also supports cross-cutting thematic interventions at the sector level, emphasising domestic and international markets. They will primarily include:
MSME's SFURTI scheme aims to promote cluster development of traditional industries and artisans with financial assistance up to Rs.5 crore. Implementing agencies like NGOs, state functionaries, and private entities can apply. The scheme covers soft, hard, and thematic interventions to boost sustainability and competitiveness of clusters. Implementation involves proposal submission, approval by Scheme Steering Committee, funds release, and engaging Technical Agencies for support.