Brief on Scheme of Fund for Regeneration of Traditional Industries (SFURTI)

Ministry of MSME, Govt. of India

Backdrop :-

India has a rich heritage of traditional industries. This sector not only plays a crucial role in providing large-scale employment opportunities at comparatively lower capital cost, but also helps in industrialization' of rural & backward areas, thereby reducing' regional imbalances, assuring more equitable distribution of income and wealth. The eco-friendly products of traditional industries have great potential for growth in production and export, developing niche products for domestic and export markets. With a view to making the traditional industries more productive and competitive and facilitating their sustainable development, in 2005-06, the Govt. of India launched, a Central Sector Scheme titled the "Scheme of Fund for Regeneration of Traditional Industries (SFURTI)".Very recently, with some modifications and amendments, Ministry of MSME has launched Revamped SFURTI Program.

Objectives of the Scheme :-

The broad objective of the scheme is to organize the traditional industries and artisans into clusters for integrated development of their traditional activities by providing infrastructure support, capacity building support, marketing support, technology support, convergence of resources, intuitional networking and thereby ensure regular employment and income enhancement for sustainability

Cluster Based SFURTI Programme :-

A cluster of MSMEs is a concentration of economic enterprises, producing a typical product/service or a complementary range of products/services within a geographical area. The location of such enterprises can span over a few villages, a town or a city and its surrounding areas. Thus a cluster of MSMEs is identified by the “product/service” that the micro and small enterprises produce and the “place” where the enterprises are located.

Cluster Based SFURTI Programme :-

Classified Traditional Industries: Khadi industry, Village industry and Coir industry

Mineral Based Industry Forest Based Industry
Cottage Pottery Industries
Lime Industries
Medicinal Plants Industries
Minor Forest based Industries
Agro Based & Food Processing Industry Polymer & Chemical Based Industry
Pulses & Cereals Processing Industries
Gur & Khandsari Industries
Palmgur Industries
Fruit & Vegetable Processing Industries Village Oil Industries
Cottage Leather Industries
Non-edible oils & Soap Industries
Cottage Match Industries
Plastics Industries
Rural Engineering & Bio-Technology Industry Hand Made Paper &Fiber Industry
PNon-Conventional Energy
Carpentry & Black smithy
Handmade Paper Industries
Fiber Industries
Service and Textiles Industry
Apparel and garmenting
Embroidery and surface ornamentations
Fabric and yarn dyeing

Components of the scheme :-

 Soft Intervention: such as capacity building programme, skill development, marketing initiative, new product development, product branding and packaging,

 Hard Intervention:such as Common Facility Centre building which includes product processing shed, Raw Material Bank, Finished product godown, office, Machinery and Tools, up-gradation of existing tools etc. and working capital etc.

 Cost of IA

 Cost of Technical Agency

Govt permits convergence of resources from Govt. and other sources for greater leverage of the artisan benefits.

Stakeholders :-

 Primary Beneficiaries

 NGO implementing Agency

 Ministry of MSME

 Nodal Agency

 Technical Agency

 Other associated institutions such as Banks and concerned line department of the Govt. and research & technology institutions, marketing institutions etc.

Duration of the Project: 18 months as per new guideline
Cost of Project: For regular cluster up to 500 artisans 2.5 crore and for Major Cluster above 500 artisans up to 05 crore.
Grant-in-aid provided by the Govt: 90% of the total project cost and in case of north east 95%
NGO – the Implementing agency has to deposit 10% cost of the hard intervention as contribution. The contribution can be deposited in installments of 25%.
IA Cost: NGO (IA) gets maximum 20 lakh or 8% of the hard intervention cost (whichever is less) towards the cost of the IA for running the project. This includes the cost of Cluster Development Executive and other running expenses. Soft intervention cost is maximum 25 lakh or 10% of the cost of hard intervention cost (whichever is less)
TA cost is 8% of the hard intervention or Rs 30 lakh whichever is less.

Obligation of NGO – IA :-

 Provide land for establishment of CFC ( Cost not to be included in the project, neither considered as contribution)

 Form a Special Purpose vehicle (SPV) a separate legal entity having 33% of the artisan representation in the board for the long term sustainability of the cluster and ownership.

 Open a dedicated Bank Account for the cluster

 Readiness for deposit of 10% own contribution

 Should select a competent CDE

 Collect Beneficiary List with details of name and address, adhar no, mobile number

 Provide Audited statement of Accounts(last three years)

 Provide Annual Report (last three years)

 Provide Organization Registration Certificate

 Provide Bye-law of Organization

 Provide Darpan Portal registration no

Benefits to NGO and Artisans :-
Benefits to NGO Benefits to Artisans
Works as promoter
Can run the business taking artisans in the cluster
Gets permanent infrastructure for doing business
Easy for bank linkage for business expansion
Gets 90% grant-in-aid for the initiative
Gets 20 lakh maximum towards cost of IA for project execution
Get regular income
No exploitation by middlemen
Enhancement of income
United effort and voice
Leverage under social security schemes like insurance, health etc.

Mode of Operation :-

 NGO proposes the cluster concept to the Nodal Agency engaged by the Govt.

 On approval of the concept the Technical Agency engaged by the NA prepares the DPR of the cluster in consultation with the IA

 The DPR is put before the Scheme Steering Committee of the Ministry of MSME for approval

 On approval IA signs agreement with NA and submits required documents

 Fund is released in installments for hard intervention and soft intervention, IA cost as per the scheme guideline.

 IA executes the project with the help of NA and TA adhering to the scheme guidelines

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