SFURTI: The Scheme for Regeneration of Traditional Industries

In 2005, the Ministry of Micro, Small and Medium Enterprises (MSME) introduced the Scheme of Fund for Regeneration of Traditional Industries (SFURTI) to foster the cluster development of traditional industries and artisans. The SFURTI has undergone revisions, and as of March 2, 2020, it has absorbed several other schemes into its framework. These include 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), and various smaller initiatives like Ready to Wear Mission and Ready Warp Units.

Objectives of SFURTI

Organize artisans and traditional industries into clusters for long-term sustainability and competitiveness.
Provide sustained employment for rural entrepreneurs and traditional industry artisans.
Increase marketability through new design interventions, improved packaging, and enhanced marketing infrastructure for cluster products.
Enhance capabilities and skills of traditional artisans through exposure visits and training.
Provide common facilities, improved equipment, and tools to promote optimal utilization of infrastructure.
Strengthen cluster governance through active stakeholder participation to address challenges and seize opportunities.
Build traditional and innovative skills, advanced processes, improved technologies, market intelligence, and new PPP models.
Establish multi-product clusters with a market-driven approach and integrated value chains for long-term sustainability.
Ensure convergence in all cluster formation and operational activities.
Identify target customers, understand their needs, and develop product lines to meet requirements.
Develop specific product lines based on the target consumer segment from a diversified product basket.
Shift from a supply-driven to a market-driven model with the right focus, product mix, branding, positioning, and pricing.
Utilize e-commerce channels to reach and expand market penetration, strategizing for a presence in the e-retail space.
Make substantial investments in quality improvement and product design.

Assistance Provided Under SFURTI

Financial aid is available from the government for designated projects within specific clusters, with a maximum amount of Rs.5 crore according to updated guidelines. The assistance provided varies depending on the project and cluster.

Who Can Apply for Cluster Development Under SFURTI

The Nodal Agencies (NAs) accept proposals for cluster development from Implementing Agencies (IAs). Entities eligible to apply as IAs for cluster development under SFURTI include:

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

The proposals for setting up clusters under the scheme should be submitted by IAs to any of the Nodal Agencies listed under the scheme, such as the Khadi and Village Industries Commission or other appointed Nodal Agencies by the MSME. IAs can send their proposals for cluster development to the respective NA offices, which will then be reviewed at the state and zonal levels before being submitted to the Scheme Steering Committee (SCC) for approval.

Implementation of SFURTI

A dedicated SFURTI website is created to efficiently manage the scheme. The website includes a Project Management System (PMS) to handle ongoing projects, solicit proposals, screen applications, and monitor progress until project completion.
Nodal Agencies (NAs) collaborate with Technical Agencies (TAs) to compile a tentative list of clusters across states. The NAs then select Implementing Agencies (IAs) responsible for managing the clusters’ day-to-day operations.
National-level Technical Agencies with expertise in small enterprise and artisanal cluster development are enlisted to provide implementation support and technical guidance to the clusters, alongside assistance to the IAs and NAs.
The SSC evaluates cluster proposals and corresponding IA submissions forwarded by the NAs. Upon review, the SSC grants approval for the proposed clusters.
NAs submit cluster-wise funding proposals to the Ministry of MSME, which are based on approved Plan of Action (PoA) and expenditure progress.
Upon receipt of Utilization Certificates (UC) and progress reports from IAs, funds are disbursed to the NAs. Subsequently, NAs allocate funds to clusters according to the approved annual action plan.
NAs issue sanction orders after final approval, releasing the first installment for hard interventions to IAS designated bank accounts. Soft intervention fund disbursement is determined by project needs and receives partial funding upon SSC’s in-principle approval.

The SFURTI scheme encompasses three types of interventions: soft, hard, and thematic.

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: