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Tata Capital > Blog > Loan for Business > What is the SFURTI Scheme? Who can be Eligible?

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What is the SFURTI Scheme? Who can be Eligible?

What is the SFURTI Scheme? Who can be Eligible?

The Scheme of Fund for Regeneration of Traditional Industries (SFURTI) was introduced by the Ministry of Micro, Small, and Medium Enterprises (MSME) in 2005. Its primary objective is to promote cluster development among traditional industries and artisans.

The program seeks to create sustainable employment opportunities by establishing Common Facility Centres. The scheme focuses on sectors like bamboo, khadi, and honey, aiming to bolster support for rural artisans and entrepreneurs.

If you are looking for a government business loan for your small business, read on as we cover the essential aspects of the MSME SFURTI programme. 

What are the objectives of the SFURTI scheme?

The scheme aims to enhance the productivity and economic sustainability of traditional industries, which employ a large portion of the population. Here are the objectives of the scheme:

1. To organise artisans and traditional industries into clusters to enhance long-term sustainability and competitiveness. 

2. To provide sustained employment for rural entrepreneurs and traditional industry artisans. 

3. To increase the marketability of cluster products through design interventions, improved packaging, and marketing infrastructure.

4. To equip traditional artisans with improved capabilities and skills through training and exposure visits.

5. To provide shared facilities, equipment, and tools for artisans to optimise infrastructure utilisation.

6. To strengthen cluster governance through stakeholder participation to address challenges and opportunities coherently.

7. To build traditional and innovative skills, advanced processes, and improved technologies.

8. To tap into e-commerce channels to expand market penetration and develop a strategy for online retail presence.

9. To invest substantially in quality improvement and product design.

How is the scheme implemented?

The scheme is carried out through the following steps:

Web-based project management system:

The SFURTI yojana operates through a dedicated website with a project management system for proposal submission, screening, and monitoring.

Cluster identification:

 The nodal agencies (NAs) identify potential clusters in consultation with technical agencies.

Appointment of technical agencies:

 National-level institutions provide implementation support and technical assistance.

Approval process:

 The Scheme Steering Committee (SSC) reviews proposals for approval.

Funds release:

Funds are released to NAs based on the approved plan of action and progress of expenditure, then to implementing agencies.

What are the interventions of the MSME SFURTI scheme?

The SFURTI scheme offers support to traditional businesses through the following interventions:

Soft interventions:

 Capacity building, skill development, product and design development, market promotion, etc.

Hard interventions:

Infrastructure creation, including packaging facilities, raw material banks, common facility centres, training centres, etc.

Thematic interventions:

 Promotion campaigns, e-commerce initiatives, research, innovation, institutional linkages, etc.

What are the eligibility criteria for the scheme?

The following groups and individuals are eligible to apply for the SFURTI scheme:

Minimum beneficiary requirement:

 Clusters must comprise a minimum of 500 beneficiary families, encompassing micro-enterprises, artisans, service providers, traders, and raw material suppliers.

Geographical concentration:

 Beneficiary families must be situated within one or two revenue sub-divisions in a district. Additionally, at least 10% of clusters must be located in the North-Eastern region to promote regional inclusivity and equitable access to benefits across diverse geographical areas.

Sector focus:

 Clusters must belong to specific sectors, including bamboo, khadi, honey, and village industries. These sectors align with the SFURTI yojana objectives of preserving heritage crafts and enhancing economic opportunities in rural areas.

Eligible applicants:

 Various entities are eligible to apply for the scheme, including:

1. Central and state government institutions are essential for facilitating the implementation of the projects and ensuring effective utilisation of resources.

2. NGOs focusing on rural development and traditional industries, leveraging their grassroots presence and community engagement to support cluster development initiatives.

3. Semi-government institutions, including public-private partnerships and autonomous bodies, bring collaborative expertise to projects.

4. Field functionaries of the Government, such as district-level officials and rural development agencies, are directly engaged in implementing and monitoring cluster projects at the grassroots level.

5. Panchayati Raj Institutions (PRIs) are vital for the scheme's initiatives to succeed, serving as local governance structures with active community participation.

6. Corporate responsibility foundations, contributing financial support and project management expertise to clusters, aligning with their CSR objectives.

7. Private sector entities, including SMEs and entrepreneur groups, forming cluster-specific Special Purpose Vehicles (SPVs) to drive innovation and economic growth in traditional industries.

What is the application process for the SFURTI scheme?

To avail of the scheme, applicants need to follow the steps given below: 

Submission of proposals:

 Eligible organisations should submit their proposals for cluster development under the scheme. They can present proposals to the respective state office or the Khadi and Village Industries Commission (KVIC), which serves as the nodal agency.

Scrutiny and evaluation:

Proposals undergo scrutiny at the state and zonal levels before being submitted for approval to the SSC. The SSC evaluates the proposals based on predefined criteria, including cluster selection, project feasibility, and alignment with its objectives.

Approval and funding:

 Upon approval by the SSC, funds are allocated to the selected clusters. Funds are released based on the approved plan of action and the progress of expenditure. Nodal agencies receive the funds, which are then disbursed to implementing agencies for cluster development activities.

Implementation and monitoring:

 Implementing agencies are responsible for executing cluster development projects. They coordinate with technical agencies, monitor project progress, and ensure compliance with the MSME SFURTI guidelines. Regular monitoring and evaluation mechanisms help track project outcomes and address challenges.

Reporting and compliance:

 Implementing agencies must submit progress reports, utilisation certificates, and other documents for business loans per the scheme's guidelines. Compliance with project timelines, budgetary allocations, and performance indicators is essential for successful implementation and continued funding support.

Scaling up and replication:

 Models of successful cluster projects help in replication and scaling up. Best practices are shared with stakeholders to inform future cluster development initiatives. Continuous improvement and adaptation are integral to the sustainability and impact of the scheme's interventions.

Final thoughts

SFURTI's comprehensive interventions, ranging from capacity building to infrastructure creation, aim to develop an inclusive and resilient rural industry across India. It involves working with nodal agencies for fund disbursements, which may delay the process. 

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