Ease of Doing Business for MSMEs: The government’s Scheme of Funds for Regeneration of Traditional Industries (SFURTI) to organise regular industries and artisans into clusters to make them competitive and enhance their revenue has authorized 433 clusters considering the fact that 2014. According to the information supplied by the MSME Minister Narayan Rane in the Rajya Sabha on Monday, about 2.5 lakh artisans have benefited via these authorized clusters. However, as per the obtainable on-line information by the Ministry of MSME, although the quantity of clusters authorized declined from 157 in FY20 to 107 in FY21, the quantity of clusters inaugurated or commissioned grew 5.5X from 17 in FY20 to 94 in FY21. Overall, the quantity of authorized clusters elevated from 30 in FY16 to 68 in FY19 and the clusters inaugurated or commission grew from one in FY16 to 14 in FY19.
“A major chunk of the activity under the scheme is in the construction of common facility centres (CFCs). So, while Covid tried its best to cut down the speed, the enthusiasm of the entire team overcame it successfully and in fact reduced the period of CFC creation from over one year to six-nine months. One good indicator of success is how many CFCs have been commissioned. That has increased significantly,” Tamal Sarkar, Executive Director of MSME cluster development body Foundation for MSME Clusters had told TheSpuzz Online.
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Rane informed the Parliament that the quantity spent for the duration of the last 3 years elevated from Rs 86.03 crore in FY19 to Rs 181.82 crore in FY20, and Rs 349.11 crore in FY21. As of July 31, 2021, Rs 82.02 crore was spent. Moreover, the quantity of artisans benefitted on an annual basis had also elevated from 28,270 in FY16 to 84,171 in FY20 just before it dipped to 62,408 in FY21. The clusters integrated coir, bamboo craft, stitching and embroidery, handloom, garments, khadi, pottery, furnishings, and so on.
Importantly, the government’s Cluster Development Programme (CDP), which focuses on enhancing capacity creating for MSEs via setting up of projects like CFCs and Infrastructure Development (ID) centers, had witnessed the lowest quantity of annual projects completed in FY21 considering the fact that FY18. The information shared earlier by Rane in the Lok Sabha showed that total projects completed in FY21 had declined to 20 from 22 in FY20, 28 in FY19, and 24 in FY18.
According to Rane, a study was carried out by IIM Lucknow in FY21 to evaluate the scheme so far. The key findings of the scheme like artisans’ shareholding in the Special Purpose Vehicle (SPV) constituted in the cluster required to be enhanced and appropriate measures have been necessary to be initiated to make certain that funds are released to the clusters in a timely manner and they are made functional inside the stipulated timelines avoiding delay. Moreover, it noted that turnover and profitability of enterprises has not drastically elevated when compared to the investment made. Hence, vital forward and backward linkages and promoting connect is required to make certain greater revenue of the cluster and artisans. The study also recommended convergence of the scheme with other equivalent government schemes.