Understanding SFURTI Scheme: MSME Support and Application Guide

January 22, 2025

13 min read

What is SFURTI Scheme?

The SFURTI full form is the Scheme of Fund for Regeneration of Traditional Industries. It 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.

Revised Guidelines

The SFURTI Yojana 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 to 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.

The revamped SFURTI scheme launch date is August 1st, 2014. Under the revised SFURTI guidelines dated 2nd March 2020, several schemes have been merged into SFURTI. This ensures a holistic approach towards promoting traditional industries. These include:

The Scheme of 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-scale initiatives like Ready-to-Wear Mission and Ready Wrap Units have also been integrated to provide comprehensive support for artisan-led industries.

By adopting these guidelines, the traditional industries SFURTI scheme subsidy focuses on improving productivity, product innovation, and market outreach for artisans. This ensures they remain competitive in modern markets.

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.

Implementation of SFURTI

Web-Based Project Management System (PMS): A centralised online platform has been developed to ensure effective management of projects under SFURTI. This system, accessible through the dedicated SFURTI website, facilitates the submission of proposals, application screening, fund disbursement, and progress monitoring till project completion.
Cluster Identification: Nodal Agencies (NAs), in consultations with Technical Agencies (TAs), prepare a state-wise list of potential clusters. These clusters comprise traditional artisans and industry workers. The Implementing Agency (IA) is then identified to manage the day-to-day operations and ensure smooth cluster activities.
Engagement of Technical Agencies: National-level institutions with expertise in small enterprises and cluster development are appointed as TAs. Their role is to provide hands-on support to clusters, assist in technical implementation, and coordinate with the NAs and IAs for seamless execution.
Approval from the Scheme Steering Committee (SSC): The proposals submitted by NAs are reviewed by the SSC. This committee evaluates each cluster proposal to ensure its alignment with the scheme’s objectives. Once approved, the proposals proceed for funding and implementation.
Prerequisites for Fund Release: The NAs submit cluster-wise proposals for fund release to the Ministry of MSME. The funds are disbursed based on the approval Plan of Action (PoA) and the expenditure progress.
Fund Allocation Process:
- To Nodal Agencies (NAs): Funds are transferred to NAs upon submission of Utilization Certificates (UCs) and progress reports.
- To Implementing Agencies (IAs): NAs release funds to IAs after obtaining approval from the SSC. The first instalment for hard interventions is deposited into the IA’s designated bank account. Funds for soft interventions are released on a need basis.

This systematic approach ensures that the SFURTI scheme’s implementation is transparent and efficient, benefiting the artisan 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?

Online Application:

Visit the SFURTI portal and register with the required credentials.
Log in to the portal and fill out the application form with accurate details.
Upload all essential documents, including the SFURTI project proposal, as per the prescribed format.
Double-check the details for accuracy before submitting the form/

Offline Application:

Prepare a detailed project proposal with a request for funding.
Eligible organisations should submit their proposals to the respective state office of KVIC. Before sending the proposal for approval to the Steering Committee, they are scrutinised by the officials at the State and the Zonal levels. – https://www.india.gov.in/spotlight/scheme-fund-regeneration-traditional-industries-sfurt.
Once approved at these levels, it is forwarded to the Steering Committee for final approval.
After approval, funding is allocated to the cluster under the SFURTI MSME subsidy program.

Documents Required for the SFURTI Subsidy Scheme

Applicants must provide the following documents:

Certificate of Registration of the organisation.
Endorsement from the supporting organisation (if applicable).
Establishment details, including date and synopsis.
List of Board of Directors and Governing Body members.
Activity area details and cluster information.
Memorandums of Understanding or links with partner organisations.
Annual audited financial statements and IT returns for the past three years.
Details of awards and recognition received, if any.
Information on team/staff experience.
Bank account details of the organisation.

Additional documents may be required as per specific cluster or project needs.

Creating a Proposal and Project Report

A comprehensive project proposal must include the following elements:

Business Strategy: Detailed plans for sales, revenue, payments, and expenses.

Cluster Profile: Overview of the cluster, including its size, location, and artisan community.

Artisans’ Profile: Demographics, skills, and contributions of the artisans involved.

Product Profile: Detailed information on the products manufactured within the cluster.

Market Assessment and Demand Analysis: Evaluation of market trends, consumer demand, and potential growth opportunities.

Intervention Strategy: Strategy based on soft, hard, or theme-based interventions.

Project Costs and Financing Options: Breakdown of costs and details of the subsidy scheme offered by the government.

Project Timelines: Phased timelines for the completion of activities.

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.

Conclusion

The SFURTI scheme empowers traditional industries by fostering cluster development. It enhances productivity and provides critical financial support to artisans. With its streamlined application process and structured implementation, it ensures sustainable growth for MSMEs. You can also rely on platforms like Lendingkart that offer easy financing options to meet the evolving needs of small businesses.

SFURTI scheme FAQs:

1. How to apply for SFURTI scheme?

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.

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

11. What are the key benefits or subsidies available for MSMEs (micro, small, and medium enterprises) under the SFURTI Scheme, and how can they apply for them?

The SFURTI (Scheme of Fund for Regeneration of Traditional Industries) offers key benefits and subsidies to MSMEs, including financial support for infrastructure, technology upgradation, and marketing. To apply, MSMEs can visit the SFURTI scheme’s official website for online application submissions. This initiative aims to enhance the competitiveness of traditional industries and promote sustainable development among micro, small, and medium enterprises.

12. Is there a specific qualification or requirement for entities to be eligible for the SFURTI Scheme, and what types of projects or clusters are typically supported?

The SFURTI Scheme, or Scheme of Funds for Regeneration of Traditional Industries, primarily targets rural and traditional industries. While there isn’t a specific qualification for entities, projects or clusters related to khadi, village industries, and agro-based activities are typically supported. Eligible applicants can apply online for SFURTI Scheme subsidies, benefiting various sectors and promoting economic growth in rural areas.

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