SFURTI Scheme: Full Form, MSME, Subsidy, Who will Apply?

August 20, 2021

9 min read

What is SFURTI Scheme?

Scheme of Fund for Regeneration of Traditional Industries (SFURTI) is a scheme launched by the Government of India under the aegis of Ministry of MSME in 2005 with the intention to promote cluster development. The main objective of the programme is to make traditional industries that spread across the country to become more competitive and profitable.

The traditional industries that employ a large chunk of workers should become more productive and economically sustainable. With SFURTI scheme in place, Common Facility Centers were to be established; and the idea was to generate sustainable employment opportunities.

The sectors in focus for the SFURTI scheme are bamboo, khadi, and honey with the sole aim to support rural artisans and rural entrepreneurs.

SFURTI Scheme Insights

Objectives of the scheme

To organize different traditional industries and local artisans into clusters. The idea is to become more competitive and promote industries for longer-term sustainability and improve the economies of scale.
To generate sustainable employment opportunities for local artisans who are involved in traditional industries and also support rural entrepreneurs.
To emphasize the marketing of cluster products by focusing on the development of new products, design intervention, and better packaging by building an improved marketing infrastructure.
To provide skill development training to artisans and enhance their capabilities through better training and trips for exposure.
To make the provision of shared facilities and provide better quality tools and other equipment to the artisans involved.
To strengthen cluster governance through the active participation of different stakeholders. This will enable them to assess inevitable challenges and emerging opportunities and thereby take the necessary steps to benefit coherently.
To focus on innovative and traditional skills, new technology, improved processes, market intelligence, and emerging new public-private partnership models that can be replicated gradually on similar cluster model based traditional industries.
To look for opportunities to establish a multi-product cluster having an integrated value chain. To take a market-driven approach for the financial viability of the project and sustainability of the cluster in the long term.
To identify potential customers of cluster products and understand their aspirations, thereby helping in establishing a production line to fulfill requirements.
To replace supply-driven sales models with market-driven models and to focus on product mix, branding, and pricing for augmenting sales.
To devise a strategy of selling cluster products on different e-commerce websites.
To support and assist in the production design and quality imprisonment of products as it is necessary to meet the quality benchmarks of products.

Funding Details of SFURTI Scheme

The financial assistance to be provided under the SFURTI scheme by the government, for different projects is subjected to a maximum amount of Rs. 8 crores.

Type of clusters

Heritage clusters with 1000-2500 artisans

Major clusters with 500 – 1000 artisans

Mini clusters up to 500 artisans

Budget per Cluster

Rs. 8 crore

Rs. 3 crore

Rs. 1 crore

Note: North-Eastern states/Jammu and Kashmir and the other Hill States have the provision of 50% reduction in artisans employed in number per cluster.

Nodal Agencies

Khadi and Village Industries Commission (KVIC) became the Nodal Agency to promote Cluster development for Khadi and related rural-based industries.
Coir Board is the nodal agency for coir based clusters.

Scheme interventions

three types of interventions that are covered under the SFURTI scheme are:

Soft Interventions – This includes general awareness of the scheme, counselling, trust-building, and motivation. It also provides skill development of artisans, capacity building, and setting up institutions. Other measures taken are exposure visit of artisans, product design, and development.
Hard interventions – Establishment of clusters for multiple products and packaging. Other initiatives include raw material banks, technology up-gradation, common facility centres, training centres, and warehousing facilities.
Thematic interventions – This includes several clusters in a single sector that emphasizes on both domestic and international markets. These initiatives are supported by marketing campaigns, brand building, and reaching out to new markets and customers by collaborating with e-commerce sites.

Potential Applicants

The potential applicants of the scheme include:

Central and State Government institutions
Non-Government Organizations (NGOs)
Semi-Government institutions
State and Central Govt. field functionaries
Panchayati Raj institutions (PRIs)
Corporate responsibility foundations
Private sector with special SPV

How to apply?

Eligible organizations should submit their proposals to the respective state office or KVIC. Before sending the proposal for approval to the Steering Committee, they are scrutinized by the officials at the State and the Zonal levels. – https://www.india.gov.in/spotlight/scheme-fund-regeneration-traditional-industries-sfurti

Cluster Selection Criteria

The clusters should be located near to the concentration of around 500 beneficiary families that includes artisans, traders, service providers, raw material suppliers, etc. Moreover, these clusters should be established within one or a maximum of two subdivisions of a district.
The clusters should be based on khadi, coir, and rural industries that include pottery, leather, etc.
The growth potential, sustainability, and opportunity to generate employment are the other factors being considered under the SFURTI scheme.
Another criterion for cluster establishment is the geographical distribution of the clusters across the country. At least 10% of the clusters are to be located in North-east states of India.

Under the SFURTI scheme, the government planned to develop 70 clusters with a proposed budget allocation of Rs. 149.44 crores. There is a proposal to establish 800 clusters under the 12^th five-year plan from the funds sanctioned by the Central government and funding from the Asian Development Bank. The government set a three-year timeline for the implementation of the scheme related to each cluster.

From 2018 to 2020, under the SFURTI scheme, 154 clusters were approved against the earlier set target of 100 by the government.

SFURTI scheme is an aspirational scheme launched in 2005 by the Government of India to establish clusters of rural-based industries in different parts of the country. The aim is to overhaul the rural industries and offer them financial support so that they become competitive, financially viable and profitable. The government has appointed nodal agencies and allocated funds to implement the scheme. The idea is to usher in a revolution in rural-based industries and make them formidable.

SFURTI scheme FAQs:

1. How to apply for SFURTI scheme?

2. What is the maximum amount that can be sanctioned under SFURTI?

The maximum amount that can be sanctioned under the scheme is ₹8 crores to support soft, hard and thematic interventions. It is eligible for a cluster with a requirement of 1000-2500 artisans.

3. What is the maximum period for project implementation?

The maximum time to implement the project under the scheme is 3 years. This is the maximum time-frame under which the project has to be executed.

4. Who is responsible for marketing the products?

The implementing agencies which include NGOs, Central and State government Institutions, Semi-Government Institutions etc. Are responsible for marketing goods. These agencies have their own Sales outlets. Even a Private sector can form SPVs and promote the products.

5. Where are artisans given skill development training?

KVIC is the principal agency to provide the training to artisans; it has its own training centres. Moreover, KVIC has also proposed to collaborate with different Professional organizations for skill up-gradation program.

6. What is the aim of the SFURTI scheme?

The main aim of the SFURTI scheme is to properly organize the artisans and the traditional industries into clusters and thus provide financial assistance to make them competitive in today’s market scenario. Modern skills and equipment ensures sustainable employment and improve the marketability of the products.

7. Who can apply under the SFURTI scheme?

The institutions that can apply under the scheme are as follows:  Central and State government institutions  Semi-government institutions  Non-government organizations  Functionaries of State and Central govt.  Panchayati-Raj Institutions  Private sector by forming SPVs  Corporate responsibility organizations with cluster development expertise.

8. What does it mean by Soft Interventions?

Soft interventions under the SFURTI project consist of following activities: i. General awareness, motivation, counselling and trust building ii. Skill development of artisans and capacity building (for entire value chain), different skills must be imparted iii. Institution development iv. Exposure visits for better understanding v. Market promotion initiatives vi. Design and Product development; vii. Participation in work seminars, Workshops and Training program on technology upgradation

9. What is hard intervention under the SFURTI scheme?

Hard interventions means creation of the following facilities: i. To setup multiple facilities for different products & packaging wherever required ii. Common Facility Centres (CFCs) iii. Raw material Banks (RMBs) iv. Upgradation of Production Infrastructure v. Tools and Technological upgradation like toolkit distribution, etc. vi. Warehousing facility vii. Training center viii. Value addition and Processing Center for multiple products.

10. What does it mean by Thematic interventionsunder SFURTI scheme?

The thematic interventions include: i. Brand building and Promotion campaign of the products ii. New media marketing iii. e-Commerce initiatives(to market goods) iv. Innovation v. Research and Development initiatives vi. Developing Institutional linkages with existing and proposed clusters

SFURTI Scheme News

Narayan Rane informs about the 433 clusters that have been approved under the SFURTI Scheme

The Minister of the MSME (Micro, Small and Medium Enterprises) sector, Mr. Narayan Rane in his addressal in the Parliament informed about the approval of 433 clusters meant to benefit around 2.5 lakh artisans under the revamped SFURTI Scheme. SFURTI stands for Scheme of Funds for Regeneration of Traditional Industries. The aim of this scheme is to form various clusters that comprise of multiple artisans and traditional industries that would compete with each other and thus uplift their standards as well as revenue at the same time to survive in the market.

Updated Date: 20-08-2021