Objectives of the Scheme:

1. To organize the traditional industries and artisans into collectives to make them competitive and provide support for their long-term sustainability and economy of scale.
2. To provide sustained employment for traditional industry artisans and producers.
3. To enhance the marketability of products of such clusters and collectives by providing support for new products, design intervention and improved packaging and also the improvement of marketing infrastructure.
4. To equip traditional artisans and producers of the associated clusters with improved skills and capabilities through training and exposure visits.
5. To promote collective business enterprises of traditional artisans and producers.
6. To make provision for common facilities and improved tools and equipment for artisans and producers to promote optimum utilization of infrastructure facilities.
7. To provide for the setting up of a multi-product cluster with an integrated value chain and a strong market-driven approach for viability and long-term sustainability of the cluster.
8. To strengthen the cluster governance systems with the active participation of the stakeholders, so that they are able to gauge the emerging challenges and opportunities, respond to them in a coherent manner and ensure equitable distribution of surplus generated by the collective among all the artisans and producers.
9. To promote traditional skills, improved technologies, advanced processes, market intelligence and new models of public-private partnerships, to gradually replicate similar models of collective/cluster-based traditional industries.
10. To focus on penetrating uncovered districts, aspirational districts, etc. for setting up collectives covering traditional industries with a special focus on endangered arts and crafts.
11. To support traditional artisans with a special focus on disadvantaged communities like SCs, STs, women, etc.
12. To ensure convergence from the design stage with each activity of the cluster formation and operations thereof.
13. To identify and understand the collective/cluster's target customers, understand their needs and aspirations and develop the present product lines to meet the requirements. Substantial focus should be on the buyer segment that places a premium on natural, eco-friendly, ethically sourced and the uniqueness of the Khadi and Village and Industries products.
14. To develop specific product lines out of the currently offered diversified basket of heterogeneous products based on the understanding of the target consumer segment. A brand unification exercise also needs to be done to maximize the value.
15. To make a paradigm shift from a supply-driven selling model to a market-driven model with the right branding, focus product mix and correct positioning and right pricing to make the offering holistic and optimal for each of the focus categories.
16. To tap E-Commerce as a major marketing channel and devise a quick strategy to make its presence felt in the E-Retail space.
17. To make substantial investments in the area of product design and quality improvement, Research and Development and emerging technologies based on the market trends with an eye to standardizing the quality of inputs and processes so that the products meet the quality benchmarks.
18. To extensively promote the latest technological advancements in order to take local to global in line with the call for 'Atma Nirbhar Bharat'.
19. To establish collectives with a special focus on the adoption of Industry 4.0, blockchain for traceability, digitization of turnover and artisan income, digitization of training modules, effluent treatment, fire safety, green energy, knowledge repositories, etc.
20. To encourage and promote Green and sustainable products and processes.

Project Interventions: The Scheme covers three types of interventions namely Soft Interventions, Hard Interventions and Thematic interventions.

• Soft Interventions: General awareness, counselling, motivation and trust building, Skill development and capacity building, Institution development, Exposure visits, Market promotion initiatives, Design and product development, Participation in seminars, workshops and training programmes on technology up-gradation etc.
• Hard Interventions: Creation of facilities such as Multiple facilities for multiple products and packaging wherever needed, Common Facility centres (CFCs), Raw Material Banks (RMBs), Up-gradation of production infrastructure, Tools and technology up-gradation, Warehousing facility, Training Centre, Value addition and processing Centre.
• Thematic Interventions: Cross-cutting thematic interventions at the sector level including several clusters in the same sector with emphasis on both domestic and international markets. These will primarily include Brand-building and promotion campaigns, new media marketing, e-commerce initiatives and innovation.

Institutional Arrangement:

• Scheme Steering Committee (SSC)
• Nodal Agencies (NAs)
• Technical Agency (TA)
• Implementing Agency (IA)

Implementation Methodology:

• Web-Based Project Management System (PMS)
• Identification of a tentative list of clusters
• Engagement and appointment of Technical Agencies (TAs)
• Approval from the Scheme Steering Committee (SSC)
• Pre-requisites for Release of Funds
• Release of Funds to Nodal Agencies (NAs)
• Release of Funds to Implementing Agency (IA)

1. 100% of Project cost excluding/except Hard Interventions.
2. 90% of Hard Intervention is eligible for the North Eastern Region, UT of Jammu & Kashmir and Hill States, and 75% of Hard Intervention for Others.

1. Non-Government organizations (NGOs), institutions of the Central and State Governments and Semi-Government institutions, field functionaries of State and Central Govt., Panchayati Raj institutions (PRIs), Private sector by forming cluster-specific SPVs, Corporates and Corporate Responsibility (CSR) foundations with expertise to undertake cluster development.

Criteria for Selection of Clusters:

1. The Selection of Clusters will be based on their geographical concentration which would be around 500 beneficiary families of artisans/micro-enterprises, suppliers of raw materials, traders, service providers, etc., located within one or two revenue subdivisions in a District (or in contiguous Districts.)
2. The potential for growth in production and generation of employment opportunities will also be considered in selecting clusters under SFURTI.
3. The geographical distribution of the clusters throughout the country, with at least 10% located in the North Eastern region will also be kept in view while selecting Clusters.