Ease of Doing Business for MSMEs: The number of MSME clusters inaugurated or commissioned during the financial year 2021-22 under the government’s Scheme of Funds for Regeneration of Traditional Industries (SFURTI) was the highest in the past seven years. According to the data from the MSME Ministry’s dashboard, 107 clusters were commissioned with a grant of Rs 302 crore in the last financial year under the SFURTI programme that organises traditional industries and artisans into clusters to boost competitiveness and provide employment. Since FY16, total 251 clusters have been commissioned, 95 in FY21 and 19 in FY20, out of 498 approved with a Rs 1,296 crore grant.
However, the employment count had dropped in FY22. The number of artisans employed across 107 clusters declined 3 per cent to 61,332 from 63,539 artisans benefitting in FY20 and 84,720 in FY20. Also, the grant extended in FY22 was lower than Rs 325 crore and Rs 398 extended by the government in FY21 and FY20 respectively, according to the data.
SFURTI Clusters
The scheme offers financial support of up to Rs 2.5 crore to ‘regular clusters’ with up to 500 artisans, and up to Rs 5 crore for ‘major clusters’ with more than 500 artisans. Moreover, the artisans are organized into special purpose vehicles (SPVs) that could be a Society registered under Societies (Registration) Act, 1860, a Co-operative Society or a Producer Company under Section 465 (1) of Companies Act, or a Trust, etc. The purpose of SPV is to develop and sustain the cluster after the project implementation period is over.
“Assistance is provided to the traditional artisans for procurement of new machineries and raw material, construction of Common Facility Centers (CFC), training, exposure visits, design and marketing interventions etc.,” Minister of State for MSME Bhanu Pratap Singh Verma had said in a written reply to a question in Lok Sabha on March 31, 2022. The commissioned projects so far included clusters for coir, crafts bamboo, embroidery, khadi, pottery, bee keeping, and more across Madhya Pradesh, Kerala, Odisha, Assam, Karnataka, Maharashtra etc.
Meanwhile, the government is also looking to enhance the number of clusters approved by 10x. Former MSME Minister Nitin Gadkari inaugurating 50 clusters in February last year said the government is looking at creating at least 5,000 clusters under the SFURTI scheme. However, he hadn’t shared a deadline for the same.