SFURTI - Energising Traditional Industries

Sameera Saurabh

SFURTI (Scheme of Fund for Regeneration of Traditional Industries) aims to give a new lease of life to traditional industries by organizing small units and artisans into clusters, thereby, increasing their production, making them competitive and profitable by enhancing marketability of products and providing sustainable employment. Emphasis has been laid on promoting cluster activities related to traditional products such as handloom, handicraft, khadi, coir, bamboo, honey, agro-processing, etc. SFURTI that was initially launched in 2005-06, was revamped in 2014 in its present form to cover diverse sectors of traditional industries across the country.

Main Objective: The basic aim of the scheme is to organize traditional industries and artisans into clusters and make them competitive, provide sustained employment and enhance marketability of products. The end is to support establishment of a collective manufacturing enterprise of artisans, allowing the artisans to produce value-added products suitable for present day markets and consumers, thereby increasing their share of the value from the enhanced product.

Financial Assistance: Financial assistance of Rs. 2.5 crore is given to regular clusters (comprising up to 500 artisans) and Rs. 5 crore Major Clusters (more than 500 artisans). Government contribution to the financial assistance varies between 90% and 95%, while the SPV (Special Purpose Vehicle) of the clusters contributes 10% - 5% (in NE, J&K and Hill States).

Key Interventions: The support under SFURTI includes hard interventions, soft interventions and thematic interventions. The hard interventions for creating physical infrastructure include setting up of a factory/Common Facility Centre (CFC), procurement of new machines, setting up of design house, procurement of raw materials, etc. Under soft intervention, the artisans are supported with 100% grant for training, awareness building, exposure visits, etc. Under thematic intervention, support is given to several clusters in the same sector for brand building, marketing and e-commerce, research and development initiatives, etc.

Eligibility: Exiting artisans from traditional clusters are eligible to form a cluster. NonGovernment Organizations (NGOs), institutions of the Central and State Governments and Semi-Government institutions, field functionaries of State and Central Government, Panchayati Raj Institutions (PRIs), and similar agencies, with suitable expertise are eligible to undertake cluster development under SFURTI.

Implementation: The Implementing Agencies (IAs), which comprise the NGOs, institutions of Central and State Governments having experience of working at the grass root level with artisans, bring together the artisans and constitute them into a Special Purpose Vehicle (SPV) to manage the enterprise in long term. IAs are responsible for implementation of cluster projects, including capacity building and handholding of artisans. Besides, there are Nodal Agencies (NAs) which are national level institutions with sectoral expertise and work as interface between clusters (IAs, SPV and artisans) and the Ministry of Micro, Small and Medium Enterprises (MSME) to support and supervise cluster implementation. The NAs also engage Technical Agencies (TAs) which are reputed technical institutions with sectoral experience.

Under SFURTI, a cluster is said to be functional only if it accomplishes the execution of the following tasks:

·         Completion of building construction

·         Installation of all machinery required for CFC

·         Electrification of all machineries and CFC building

·         Trial runs for commercial production

·         Tie-ups for marketing linkages

·         All clearances and permissions in place

·         Initiation of commercial production and sales

The process of functionalisation of cluster involves a large number of artisans, who have to be mobilised and organised. Since clusters comprise 300-1000 artisans, it takes considerable time and effort to educate the artisans and bring synergy among this large group. Only after such synergy has been developed, the artisans are able to work towards a common goal.

Achievements:  A total of 498 clusters have been approved under SFURTI since 2015-16. This entails a commitment of Rs. 1292.94 crores directly benefitting 2.94 lakh traditional artisans. These clusters are spread across the length and breadth of the country, covering 311 districts, including 89 aspirational districts. 261 of the 498 clusters approved under SFURTI have so far become functional, implying that building and machinery installation have been completed and production and marketing have commenced. The clusters cover a wide range of sectors and their artisans. Handicrafts, bamboo, textile, coir, honey, agri-business, khadi, etc. are covered across all parts of the country. Women, Scheduled Castes, Scheduled Tribes, Other Backward Classes, and Minorities form the majority of SFURTI beneficiaries in most clusters.

Sectoral Coverage of SFURTI Clusters

Recent Initiatives:

(i)                 Previously, the implementation period for a SFURTI cluster was 3 years. To ensure benefits of the interventions under the scheme are available to the artisans early, the timelines for setting up regular and major clusters have been reduced to 12 and 18 months respectively. To ensure the same, the government has taken steps such as allowing artisans to deposit their contribution in four instalments, guidance to IAs for tendering of machines and building construction, regular review meetings on progress of the clusters, etc

(ii)               Apart from the procedural upgradations, clusters have been encouraged to adopt industry best practices in order to make every cluster a state-of -art Model Cluster.

(a)   The Ministry has encouraged digitization under which the clusters are continuously asked to digitize their production lines, manufacturing and administrative processes in order to bring in more transparency and efficiency

(b)   Clusters are encouraged to align their machineries in consultation with lean system experts in order to be more cost effective and efficient

(c)    Green technology such as solar power, waste minimization/utilization, rain water harvesting, etc. are being promoted and adopted at every cluster

(d)   The Ministry is also encouraging paintings of the art and craft, the products and the culture of the cluster to be depicted on outside walls of the Common Facility Centers (CFCs) so as to attract tourists and develop the CFCs as tourist destinations

(e)    Greenery and plantation around the cluster for beautification is being promoted in all SFURTI clusters

(f)     Special focus is being given on adoption of blockchain technology, particularly in food processing and honey clusters which increase the value of the produce due to authentic identification of its source.

(g)   Besides, nodal agencies are also being encouraged to develop apps to monitor the income of the artisans in the clusters.

(iii)             All clusters are being connected to specialised institutions for design development so that new products are designed as per the market demand.

(iv)             All clusters are encouraged to be connected to e-commerce portals, including dedicated portals designed by some nodal agencies to promote the digital publicity and sale of products.

(v)               Tie ups with various eminent institutions are being worked upon to ensure support on new technologies to the clusters in various sectors.

(vi)             During the COVID-19 pandemic, Ministry extended financial assistance to the SFURTI artisans with working capital loan for meeting their day-to-day operational expenses. This initiative not only assisted the artisans with immediate cash in hand during critical COVID-19 crisis, but also empowered them to continue their production and sustain their livelihoods

(vii)           In order to mitigate the challenges created by COVID-19 induced lockdowns, restriction on physical sale and the dip in market demand, the clusters have been assisted with participation in virtual exhibitions, online buyer-seller meets, production of auxiliary medical products like masks, sanitizers, etc.

(viii)         Year wise sanction and functionalisation of clusters is mentioned in the table below:

A national level exhibition of traditional products from SFURTI clusters was organised for the first time commemorating Azadi ka Amrit Mahotsav from 1st to 15th October, 2022 at Dilli Haat, New Delhi. During the SFURTI Mela, 100 artisans from 50 SFURTI clusters covering 28 States exhibited their traditional products of handloom, handicrafts, khadi, coir, agro-processing. These included clusters such as- Sozni Embroidery cluster of Jammu and Kashmir, Cane and Bamboo cluster of Meghalaya, Channapatna Toy Cluster of Karnataka, Natural Dye Cluster of Rajasthan, Madhubani painting Cluster of Bihar, Kolhapuri Traditional Jewellery cluster of Maharashtra, Coir Cluster of Kerala, Carpet and Durrie Cluster of Uttar Pradesh, Millet Cluster of Odisha, Eri Silk Khadi Cluster of Arunachal Pradesh among others. The purpose of this Mela was to promote the traditional products from across the country among the citizens, during the festive times. Besides, this mela will also open new avenues for the artisans for marketing and sales of these cluster products. Live demonstration of manufacturing processes of traditional products was also been organized in the theme pavilion of this Mela.

(The author is Economic Adviser looking after Finance and Budget Division of Ministry of MSME. She can be reached at sameera.saurabh@gmail.com) Views expressed are personal