The SFURTI Scheme (Scheme of Fund for Regeneration of Traditional Industries) is an initiative by the Ministry of MSME, Government of India, launched to boost traditional industries and artisanal clusters across the country. It aims to organise artisans into collectives to enhance their competitiveness and sustainability. The scheme provides financial support for skill development, infrastructure creation, technology upgradation, and market linkages. Check your business loan eligibility if you're planning to supplement SFURTI benefits with additional funding for operational needs.
Implemented through nodal agencies, SFURTI helps rejuvenate industries such as khadi, coir, handloom, handicrafts, and agro-based products by promoting cluster-based development.
SFURTI scheme - key highlights
| Particulars | Details |
|---|---|
| Full form | Scheme of Fund for Regeneration of Traditional Industries (SFURTI) |
| Administering Ministry | Ministry of Micro, Small and Medium Enterprises (MSME) |
| Launch year | Introduced in 2005 and comprehensively revamped with effect from 1 August 2014 |
| Nodal agencies | Khadi and Village Industries Commission (KVIC) and the Coir Board |
| Target beneficiaries | Artisans and workers engaged in traditional industries and organised into recognised clusters |
| Eligible sectors | Khadi, village industries, coir, handloom, handicrafts, agro-based industries and other traditional sectors |
| Financial assistance for regular clusters | Up to Rs. 2.5 crore for clusters comprising up to 500 artisans |
| Financial assistance for major clusters | Up to Rs. 5 crore for clusters comprising more than 500 artisans |
| Nature of assistance | Grant-based support provided to the cluster through an implementing agency and a Special Purpose Vehicle (SPV); it is not a direct loan to individual artisans |
| Types of interventions supported | Soft interventions, hard interventions and thematic interventions aimed at improving competitiveness, productivity and sustainability of traditional industries |
Objectives of SFURTI scheme
- To organise traditional industries and artisans into clusters.
- To develop sustainable employment opportunities in rural areas.
- To enhance marketability of products through brand building and design support.
- To improve the skills of artisans through training and capacity building.
- To provide common facilities and improved tools for production.
- To promote traditional crafts in both domestic and international markets.
SFURTI funding: how much a cluster can receive
SFURTI financial assistance is determined by the size of the artisan cluster rather than being provided as a uniform amount. Under the current framework, the maximum funding available is linked to the number of artisans covered by the cluster.
| Cluster type | Approximate number of artisans | Maximum financial assistance |
|---|---|---|
| Regular cluster | Up to 500 artisans | Up to Rs. 2.5 crore |
| Major cluster | More than 500 artisans | Up to Rs. 5 crore |
Earlier revised SFURTI guidelines categorised clusters into three distinct groups. Mini Clusters, comprising up to 500 artisans, were eligible for assistance of up to Rs. 1.5 crore. Major or Significant Clusters, covering 500 to 1,000 artisans, could receive up to Rs. 3 crore. Heritage Clusters, consisting of 1,000 to 2,500 artisans, were eligible for funding of up to Rs. 8 crore, which represented the maximum assistance available for a single project.
To encourage participation from geographically challenging regions, the minimum artisan requirement for cluster formation is relaxed in hilly states and the North-Eastern region, often by approximately 50 per cent compared with the standard eligibility criteria.
Eligibility for the SFURTI scheme
Eligible implementing agencies
The following organisations may act as implementing agencies under the SFURTI scheme:
- Non-Governmental Organisations (NGOs) with relevant experience in cluster development and artisan support.
- Central Government, State Government and semi-government institutions involved in rural, industrial or enterprise development.
- Panchayati Raj Institutions (PRIs).
- Cooperatives, public trusts, producer companies and Section 8 companies possessing suitable expertise in the relevant traditional industry sector.
- Field-level agencies and functionaries of the Central and State Governments.
Cluster eligibility requirements
To qualify for assistance under SFURTI, a cluster should generally meet the following requirements:
- There should be an existing concentration of artisans engaged in a traditional industry. For a regular cluster, this typically involves around 500 artisans, although the minimum requirement may be relaxed for hilly states and the North-Eastern region.
- A Special Purpose Vehicle (SPV) must be established, with artisans holding majority representation to ensure community participation in decision-making.
- Suitable land should be available for cluster infrastructure and activities, including the establishment of a Common Facility Centre (CFC), where required.
- A Detailed Project Report (DPR) must be prepared, demonstrating the cluster's viability, employment-generation potential, sustainability and prospects for growth.
Nodal and implementing agencies
- Nodal agencies — The Khadi and Village Industries Commission (KVIC) serves as the nodal agency for khadi and village industry clusters, while the Coir Board performs this role for coir-based clusters. Other empanelled institutions may also be designated to provide nodal or technical support under the scheme.
- Technical agencies (TAs) — These are national or regional institutions with established expertise in artisan-based cluster development. They provide technical guidance, project support, capacity building and handholding assistance throughout the implementation process.
- Implementing agencies (IAs) — These are the organisations responsible for executing the cluster project on the ground. They may include NGOs, government institutions, cooperatives, trusts and other eligible entities. Typically, one implementing agency is appointed for each cluster.
- Special purpose vehicle (SPV) — This is the cluster-level legal entity established to manage and operate the project. The SPV is formed with substantial representation from the artisan community and serves as the primary vehicle through which the cluster activities and assets are administered.
How to apply for the SFURTI scheme - Step-by-step process
- Visit the Official MSME portal: Go to the Ministry of MSME’s website to access scheme details and application formats.
- Identify a cluster: Select a traditional industry cluster suitable for development.
- Prepare a Detailed Project Report (DPR): Include objectives, budget, stakeholders, proposed facilities, and implementation strategy.
- Form an SPV (Special Purpose Vehicle): If required, register a cooperative, society, or company.
- Submit the proposal: Send the DPR to the designated Nodal Agency.
- Approval process: Upon evaluation, the Technical Agency and Scheme Steering Committee (SSC) will review and approve the project.
- Implementation: Once sanctioned, funds are released in phases, and the cluster activities commence.
SFURTI vs. other MSME schemes
| Feature/Criteria | SFURTI scheme | Other MSME schemes |
|---|---|---|
| Target beneficiaries | Traditional industry clusters and artisans | MSMEs across various sectors |
| Financial support | Up to Rs. 5 crore per cluster | Varies (credit-linked or subsidy-based) |
| Implementation structure | Cluster-based via Nodal Agencies | Direct or through banks and financial partners |
| Skill development | Yes | Yes |
| Market linkage support | Included | May or may not be included |
| Credit access | Indirect (through convergence) | Direct (e.g., MSME loan) |
Conclusion
The SFURTI Scheme is a significant initiative to support and revitalise India’s traditional industries through structured cluster development. It not only creates sustainable employment in rural areas but also helps preserve the rich cultural heritage of Indian crafts. By integrating financial aid, infrastructure, and marketing support, SFURTI offers artisans a path toward economic empowerment.
For businesses and artisans seeking to scale operations or invest in better facilities, exploring a business loan alongside SFURTI support can be a strategic move for growth.
