The Ministry of Micro launched the scheme of Fund for Regeneration of Traditional Industries (SFRUTI), Small and Medium Enterprises (MSMEs), and India’s government in 2005. This scheme’s primary objective is to enable the cluster development of traditional industries, which will aid them to be more active and profitable. SFURTI Scheme will generate sustainable employment opportunities by establishing Common Facility Centers.
What is cluster development?
Cluster development aims to form clusters of enterprises producing similar enterprises and activities. According to the programme, a cluster would be defined as a group of enterprises situated within an identifiable, practical and contiguous form, which produce or render similar products.
Cluster Section Criteria:
Clusters have to meet the following criteria in order to be applicable for the SFURTI scheme:
- Clusters should be established within one or two subdivisions of a district. They should ideally be located at the epicentre of 500 beneficiary families that include artisans, service providers, traders, suppliers of raw materials, etc
- It is imperative that the clusters are based on khadi, coir, and rural industries that include pottery and leather. This is primarily because it is these enterprises that specifically fall under MSMEs, which need support and guidance
- At least 10% of clusters is located in the North-Eastern states of India. It is vital that the clusters are established at a wide geographical distribution
- Under the SFURTI scheme, the cluster’s potential to grow, improve, learn and sustain itself in the market is essential
Objectives of the SFURTI Scheme:
- The SFURTI scheme organises traditional industries and artisans into clusters. This enables them to become more competitive. It helps to promote industries for longer-term sustainability, which gradually improves the economy of scale
- It provides support for enhancing employment opportunities and increasing the marketability of products that fall under each cluster
- It supports local artisans and promotes rural entrepreneurs
- It focuses on improving the skills of artisans by increasing the development of new products, improved packaging ideas, design interventions and better marketing strategies and infrastructure
- It provides skill development training for all artisans to amplify their capabilities through advanced training and trips for exposure
- It allocates shared facilities and equips the artisans with better quality tools
- Through the active participation of various stakeholders, it strengthens the clusters. This will empower them to gauge the emerging challenges and opportunities and consequently prepare themselves for it
- It helps them to build innovative and traditional skills, market intelligence and new technology. It improves their overall skill by taking a market-driven approach for the financial viability of the project and feasibility of the cluster in the long-term
- It identifies potential customers of cluster products and understands their aspirations
- It replaces supply-driven sales models with market-driven models. This helps them to focus on branding, pricing and product mix
- It helps device strategies of selling cluster made products of a diverse group of e-commerce websites
- It helps them meet the quality standards of products by supporting and assisting in product design
Who is Eligible to Apply for the SFURTI Scheme?
- Corporates and Corporate Responsibility (CRS) Foundations
- Semi-Government Institutions
- Panchayat Raj Institutions (PRI)
- Non-Government Organisations (NGOs)
- Field functionaries of State and Central Governments
- Private Sectors that have specific SPVs
- Institutions of Central and State Governments
How Can One Apply for the SFURTI Scheme?
Organisations or enterprises that are duly eligible for the SFURTI Scheme can send their proposals to the office of Khadi and Village Industries Commission or KVIC. The applications are scrutinised at the State and Zonal level before being submitted to the Scheme Steering Committee for final approval.
To understand SFURTI Guidelines and programme objectives in even more depth, you can visit https://msme.gov.in/sites/default/files/SFURTI_GUIDELINES_REVISED.pdf.
SFURTI Scheme Interventions:
The scheme covers three types of interventions which are as follows:
|Soft interventions||This entails general awareness, counselling, motivation and trust-building, skill development and capacity building, institution developments, exposure visits, market promotion initiatives, design and product development, participation in seminars and workshops and ample opportunities for overall skill development in technical fields.|
|Hard interventions||This creates multiple facilities for a plethora of products and pays attention to packaging requirements. A variety of initiatives include Common Facility Centers (CFCs), Raw Material Banks (RMBs), up-grading production infrastructure, warehousing facility, up-grading tools and technology, and training value addition and processing centre.|
|Thematic interventions||This intervention facilitates several clusters under a single sector. It lays emphasis on both domestic and international markets. This will primarily enhance brand-building and promotion campaigns, new media marketing and e-commerce initiatives, and innovation.|
Funding Details to Support Soft, Hard and Thematic Interventions under SFURTI Scheme:
Note: For North-Eastern regions/J&K and Hill States, there will a 50% reduction in the number of artisans per cluster.
There are three types of clusters and a set budget according to the cluster selected. They are as follows:
- Heritage Cluster: This cluster can include 1000-2500 artisans. The budget limit for this cluster is Rs.8 crore.
- Major Cluster: This cluster can include 500-1000 artisans, and the maximum budget limit is Rs.3 crore.
- Mini Cluster: This can accommodate up to 500 artisans. The cluster budget limit for the same is Rs.1 crore.
Achievements of the SFRUTI Scheme so far:
- The SFURTI scheme was launched on August 1st 2005, with an expenditure of Rs.149.44 crore spent for the development of 71 clusters with expansive coverage of approximately 44500 artisans in the first phase. This called for a set of revised guidelines to streamline the approval process, secure the fund flow and remove whatever congestions were present at the time.
- Beyond this, 71 clusters have been given approval by the Scheme Steering Committee, and 32 DPRs have been given final approval with the assistance of Rs.65.87 crore, out of which 30.33 crores has been released.
- To date, 30438 artisans have benefitted through this scheme.
- The future target is set at 800 clusters of khadi, village industries and coir, bearing a cost of Rs.850.00 crore to cover the operations of around 4 lakh artisans.
SFURTI Scheme is an aspirational scheme aiming to overhaul the rural industries and offer them complete financial support to promote a competitive, financially viable and profitable spirit. From 2018 to 2020, in the span of two years, under this scheme, 154 clusters were approved against the earlier set target of 100 clusters by the government.