Scheme of Fund for Regeneration of Traditional Industries (SFURTI): A Deep Dive into Empowering Artisans for 2025-26

Introduction: The Soul of India’s Economy

India is a land of vibrant culture, ancient traditions, and unparalleled craftsmanship. For centuries, our traditional industries—handicrafts, handlooms, coir, khadi—have not just been economic activities; they have been the very fabric of our rural communities, a source of livelihood, and a testament to our rich heritage. These industries are the silent engines of our economy, employing millions of artisans, often in the most remote corners of the nation.

However, in the face of rapid industrialization and global competition, these traditional sectors have often struggled to keep pace. Challenges like outdated technology, fragmented supply chains, lack of market access, and poor infrastructure have hindered their growth. The artisans, despite their immense skill, have often found themselves on the margins, unable to command the right price for their exquisite products.

Recognizing this critical gap, the Government of India, through the Ministry of Micro, Small & Medium Enterprises (MSME), conceptualized a powerful intervention: the Scheme of Fund for Regeneration of Traditional Industries (SFURTI). Launched in 2005 and revitalized over the years, SFURTI is more than just a financial assistance program. It is a holistic mission to transform these traditional sectors, making them vibrant, competitive, and profitable hubs of economic activity.

As we look towards the 2025-26 financial year, the role of SFURTI has become more crucial than ever. Against the backdrop of a renewed national focus on ‘Make in India’, self-reliance (Aatmanirbhar Bharat), and strengthening the MSME sector, SFURTI emerges as a key pillar in empowering our artisans and preserving our cultural legacy for generations to come. This guide provides an expert-level, in-depth analysis of the SFURTI scheme, its objectives, benefits, and operational framework, offering a clear roadmap for artisans and organizations looking to harness its potential in 2025-26.

What is SFURTI? Understanding the Core Concept

At its heart, SFURTI operates on a cluster-based development model. Instead of supporting individual artisans in isolation, the scheme encourages them to organize into groups or clusters. This collective approach is the scheme’s foundational strength.

Imagine a village famous for its pottery. Instead of each potter working alone in their small hut with a traditional wheel, struggling to buy clay in small quantities and selling to a local middleman, SFURTI helps them come together. They form a collective, a Special Purpose Vehicle (SPV), which could be a cooperative society, a producer company, or a trust.

This collective then becomes the focal point for all interventions under SFURTI. It allows for:

• Economy of Scale: Buying raw materials in bulk, reducing costs for everyone.
• Shared Infrastructure: Accessing modern machinery and equipment that no single artisan could afford.
• Collective Bargaining Power: Negotiating better prices from buyers and suppliers.
• Enhanced Knowledge Sharing: Learning new techniques and designs from each other and from experts.

By fostering this collaborative ecosystem, SFURTI transforms scattered, unorganized artisans into a formidable, organized economic entity.

The Guiding Objectives: SFURTI’s Vision for 2025-26

The SFURTI scheme is driven by a set of clear and powerful objectives, designed to create a sustainable and long-lasting impact. For 2025-26, these objectives are perfectly aligned with India’s broader economic goals.

• To Organize and Strengthen: The primary goal is to organize traditional industries and artisans into clusters to make them competitive and enhance their collective bargaining power. This helps them stand strong in a competitive market.
• To Create Sustainable Employment: By revitalizing these industries, SFURTI aims to provide regular, sustainable employment for artisans and rural entrepreneurs, preventing migration to urban centers in search of work.
• To Boost Marketability: The scheme focuses on enhancing the marketability of products. This is achieved through support for new designs, improved packaging, product diversification, and robust marketing strategies. The goal is to move from being mere producers to creators of globally sought-after brands.
• To Upgrade Skills and Technology: SFURTI aims to equip artisans with improved skills and modern tools. This involves training programs, exposure visits to successful clusters, and the introduction of appropriate modern technology that complements their traditional skills without destroying them.
• To Provide Essential Infrastructure: The scheme provides financial assistance to build Common Facility Centers (CFCs). These centers house machinery, raw material banks, and other shared infrastructure, ensuring artisans have access to the best possible production facilities.
• To Foster Innovation and Public-Private Partnerships: SFURTI encourages innovation in production and marketing and seeks to build new models of public-private partnerships (PPPs) to ensure the long-term sustainability and replication of these successful clusters across the country.

Key Benefits: How SFURTI Transforms Lives and Industries

The benefits of the SFURTI scheme are comprehensive, touching every aspect of a traditional industry’s value chain. These interventions are broadly categorized into three types: Hard Interventions, Soft Interventions, and Thematic Interventions.

Hard Interventions: Building the Foundation for Growth

This is the tangible, infrastructure-focused part of the scheme. The government provides significant financial support—up to 90% of the project cost (95% in North-Eastern Region, J&K, and Hilly Areas)—for setting up these crucial facilities. The financial assistance is scaled based on the size of the cluster:

• Regular Clusters (Up to 500 artisans): Up to ₹2.5 crore in Government of India (GoI) support.
• Major Clusters (More than 500 artisans): Up to ₹5 crore in GoI support.

The key components of Hard Interventions include:

• Common Facility Centers (CFCs): This is the heart of a SFURTI cluster. A CFC is a shared production center that can include:
  • Modern Machinery: Advanced looms for weavers, modern pottery wheels and kilns for potters, food processing equipment for agro-based industries, etc. This helps improve quality, consistency, and production speed.
  • Testing and Quality Control Labs: To ensure products meet national and international standards.
  • Packaging Units: Professional packaging solutions that enhance product appeal and shelf life.
  • Training Halls: For conducting skill development programs.
• Raw Material Banks (RMBs): A major challenge for individual artisans is the high cost and inconsistent supply of quality raw materials. An RMB procures raw materials in bulk at wholesale prices and makes them available to artisans at a fair cost. This ensures a steady supply of quality inputs, which is crucial for product excellence.
• Warehousing Facilities: Secure storage space for raw materials and finished goods, protecting them from damage and spoilage.
• Value Addition and Processing Centers: Facilities for activities like seasoning wood, processing honey, dyeing yarn, or polishing finished goods, which add significant value to the final product.

Soft Interventions: Nurturing Skills and Building Capacity

While infrastructure is vital, it is the skill and spirit of the artisans that truly drive success. SFURTI recognizes this by providing up to ₹25 lakhs per cluster for soft interventions, which include:

• Skill Development and Training: This is a cornerstone of the scheme. Artisans receive training on:
  • Using new tools and technology.
  • Advanced production techniques.
  • New design development, often with the help of professional designers from institutions like the National Institute of Design (NID).
  • Financial literacy, bookkeeping, and business management.
• Exposure Visits: Artisans are taken on visits to other successful clusters, trade fairs, and national expos. This broadens their horizons, exposes them to new ideas, and helps them understand market trends.
• Buyer-Seller Meets: SFURTI facilitates direct interaction between artisans and potential buyers, including retailers, exporters, and corporate clients. This helps eliminate middlemen and ensures better price realization for the artisans.
• Design and Product Development Support: The scheme provides funding to engage professional designers to help artisans create new products that appeal to modern tastes while retaining their traditional essence.
• Market Promotion Initiatives: This includes support for creating a brand identity for the cluster, developing marketing materials like brochures and catalogs, and participating in exhibitions and trade fairs.

Thematic Interventions: Creating a Brand and Reaching the World

Beyond individual clusters, SFURTI also supports broader, sector-level activities. These thematic interventions focus on:

• Brand Building and Promotion Campaigns: Creating a strong brand for a specific craft at a regional or national level (e.g., “Banarasi Silk,” “Kutch Handicrafts”).
• E-commerce and Digital Marketing: A critical component for 2025-26. SFURTI clusters are provided support to get their products listed on popular e-commerce platforms like Amazon Karigar, Flipkart Samarth, and the Government e-Marketplace (GeM). They are also trained in using social media for marketing.
• Research & Development: Supporting innovation in tools, processes, and product applications for traditional industries.
• Developing Institutional Linkages: Connecting clusters with academic institutions, research labs, and export promotion councils to foster continuous improvement and market expansion.

The Institutional Framework: Who Does What?

The implementation of SFURTI is a collaborative effort involving several key players. Understanding their roles is essential for any organization looking to participate in the scheme.

• Ministry of MSME: The apex body, responsible for policy guidelines, budget allocation, and overall supervision of the scheme.
• Nodal Agencies (NAs): These are national-level institutions appointed by the Ministry to oversee the scheme’s implementation. Key NAs include the Khadi and Village Industries Commission (KVIC) and the Coir Board. They are responsible for receiving and scrutinizing proposals, releasing funds, and monitoring the progress of clusters.
• Implementing Agencies (IAs): These are the grassroots organizations that work directly with the artisans to form clusters and implement the project. IAs can be:
  • Non-Governmental Organizations (NGOs)
  • Institutions of the Central and State Governments
  • Semi-Government institutions
  • Panchayati Raj Institutions (PRIs)
  • Corporate entities and Corporate Social Responsibility (CSR) foundations (with a higher contribution).
  • The IA is responsible for providing the land for the CFC and contributing 10% of the Hard Intervention cost (5% in NER, J&K, and Hill Areas).
• Technical Agencies (TAs): These are expert institutions that provide technical support to the IAs. Their role includes conducting diagnostic studies to assess the potential of a cluster, preparing the Detailed Project Report (DPR), and providing technical guidance during project implementation. The cost of the TA is covered by the scheme.
• Special Purpose Vehicle (SPV): As mentioned earlier, this is the legal entity formed by the artisans of the cluster. The SPV owns and manages the assets created under the project, such as the CFC. It is responsible for the day-to-day operations and ensuring the long-term sustainability of the cluster. An SPV can be registered as a Society, a Cooperative, a Producer Company, a Section 8 Company, or a Trust.

How to Apply for SFURTI in 2025-26: A Step-by-Step Guide

The application process for SFURTI is methodical and transparent, designed to ensure that only viable and well-planned projects are selected. The entire process is managed online through the official SFURTI portal.

Step 1: Identify a Potential Cluster The first step for a potential Implementing Agency (IA) is to identify a geographical concentration of artisans in a specific traditional industry (e.g., handloom, handicraft, bamboo, honey, etc.). The cluster should have a sufficient number of artisans (typically 100-500 or more) to be viable.

Step 2: Conduct a Diagnostic Study and Prepare a Proposal The IA, usually with the help of a Technical Agency (TA), conducts a Diagnostic Study Report (DSR). This study assesses the strengths, weaknesses, opportunities, and threats (SWOT) of the cluster. It analyzes the existing value chain, identifies critical gaps, and determines the specific interventions needed.

Step 3: Submit the Proposal Online Based on the diagnostic study, the IA prepares a preliminary proposal and submits it online on the SFURTI portal (https://sfurti.msme.gov.in/).

Step 4: Scrutiny by Nodal Agency The Nodal Agency (like KVIC) scrutinizes the proposal for its feasibility and alignment with SFURTI guidelines. If the proposal is found promising, the NA recommends the appointment of a Technical Agency to prepare a comprehensive Detailed Project Report (DPR).

Step 5: Preparation of the Detailed Project Report (DPR) The TA works closely with the IA and the artisans to prepare the DPR. This is a critical document that outlines:

• The vision and objectives of the project.
• Profiles of the artisans.
• Detailed plans for Hard and Soft interventions.
• A comprehensive budget with cost breakdowns.
• The proposed business model for the SPV.
• A sustainability plan for the cluster post-project completion.

Step 6: Approval by the Scheme Steering Committee (SSC) The final DPR is submitted to the Nodal Agency, which then presents it to the Scheme Steering Committee (SSC) at the Ministry of MSME for final approval.

Step 7: Fund Disbursement and Project Implementation Once the project is approved, the funds are released in installments to the Nodal Agency, which then disburses them to the Implementing Agency to begin the work on the ground. The implementation is closely monitored at every stage.

Use Cases: SFURTI in Action

The true measure of a scheme’s success lies in the stories of transformation it creates. Here are a few examples of how SFURTI is changing lives across India.

Use Case 1: The Rebirth of Amarchinta Silk in Telangana

• The Problem: The Amarchinta Silk Handloom Cluster in Telangana had a century-old legacy, but its weavers were struggling. They used outdated looms, had no direct market access, and their incomes were low and irregular.
• The SFURTI Intervention: Under SFURTI, a Common Facility Centre was established with modern looms, dyeing units, and design facilities. Over 200 artisans were trained in advanced weaving techniques and new design development. A marketing strategy was put in place, including partnerships with e-commerce platforms and a buyer subscription model.
• The Impact (as of 2024-25): Annual sales increased significantly. Artisan incomes saw a substantial rise. The cluster gained national recognition and is now a self-sustaining entity, preserving its cultural heritage while ensuring a prosperous future for its weavers.

Use Case 2: Empowering Bamboo Artisans in Tripura

• The Problem: Tripura has an abundance of bamboo, but artisans were primarily making low-value products like baskets and incense sticks. They lacked the technology to create modern, high-value bamboo products.
• The SFURTI Intervention: A SFURTI cluster was established focusing on bamboo value addition. A CFC was equipped with modern bamboo processing machinery for making furniture, flooring tiles, and lifestyle products. Artisans were trained by experts from the National Institute of Design in contemporary product design.
• The Impact (Projected for 2025-26): The cluster is poised to become a major supplier of eco-friendly bamboo furniture and lifestyle products to urban markets across India. Artisans have diversified their product range, and their income levels have more than doubled. The project is creating a complete “waste-to-wealth” ecosystem for the local bamboo economy.

Frequently Asked Questions (FAQ) for 2025-26

Conclusion: Weaving a Self-Reliant Future

The Scheme of Fund for Regeneration of Traditional Industries (SFURTI) is a visionary initiative that holds the key to unlocking the immense potential of India’s rural, artisan-based economy. It is a bridge between tradition and modernity, between heritage and commerce.

As we move further into 2025-26, SFURTI is not just a scheme; it is a movement. A movement to restore dignity and prosperity to our artisans. A movement to transform our villages into thriving centers of production. A movement to showcase the brilliance of Indian craftsmanship to the world.

For the artisans of India, SFURTI offers a pathway from subsistence to success. For the nation, it offers a model for inclusive, sustainable, and culturally-rooted economic growth. By empowering our traditional industries, we are not just creating jobs; we are preserving the very soul of India and weaving a stronger, more self-reliant future for all.