In order to promote cross-cutting thematic interventions at the national and international level, an additional 5% of the total budget allocation will be earmarked. Activities such as national and international level brand promotion campaigns, New Media marketing, E-commerce initiatives, Sector level Innovation, R&D initiatives, Program level knowledge portal to promote cross-learning, thematic blogs, information dissemination and propagation of best practices, Web based Project Management System (PMS), Creation of Centres of Excellence in selected sectors by strengthening existing technical institutions under M/o MSME to lead various cluster based activities such as technology incubation & transfer, knowledge exchange, cluster twining and establish resource networking. Other activities may include training of CDEs, IAs, national level cross-learning workshops and sector specific innovation, research and development initiatives. These activities shall be supported with due approval of Scheme Steering Committee.

• Arrangement of requisite land for construction of common facilities by the IA in terms ofregistered sale or lease deed (long term of 15 years or more) in the IA’s name.
• Confirmation on availability of 10%/5% (NER and Hilly areas) IA’s share.

6. Program fund management including NA shall be responsible to ensure timely disbursement of funds to the IAs on recommendation of TA to ensure time bound completion of projects;

7. Review performance of the TAs;

8. Monitoring and evaluation of the cluster projects being implemented;

9. NAs are delegated powers to take decisions, under intimation to SSC (within 15 days of their taking decision), with regard to the following:-

• Change of cost of interventions i.e. SI/ HI. Thematic (allowed only if cost is equal to or less than the approved cost).
• Change of Technical Agency.
• Change of Cluster Development Executive (CDE).
• Change of IA.
• Change of Plant & Machinery (P&M) within the approved cost.
• Change of location of cluster within the same District of cluster/ within participating villages.

Established national-level institutions, with proven expertise in artisanal and small enterprise cluster development shall be engaged as Technical Agencies (TAs) to provide close handholding and implementation support to the SFURTI clusters. The TAs shall provide technical support to the NAs and the IAs. The responsibilities of the TAs will include preparation and validation of Cluster Action Plans, conducting training of the Cluster Development Executives (CDEs) and other officials of the IAs and NAs, regular monitoring of the cluster on monthly/ quarterly basis and submit report on quarterly basis, to the respective field office of Nodal Agencies.

The role and responsibility of TAs includes the following:

• Sensitization and awareness generation in the clusters about the scheme;
• Identification of potential IAs;
• To identify focus products and product mix for the Cluster for domestic and export markets. That may also include multi products in the cluster and creating linkages with other available network of cluster in the adjoining Primary Cluster within the given budgetary allocation and as per approval of DPR.

• TA to put in place a suitable business plan detailing the revenue model based on appropriate user fee, mechanism to collect it to enable the SPV to achieve the projected outcomes in terms of productivity, sales, employment, wages enhancement, overall income of the Cluster as projected in the DPR;
• TA should assist the IA/ SPV in engagement of a Design House/Designer with appropriate terms of reference and detailed scope of work for extending appropriate input of design, product processing, product development and proper packaging in consultation with NA, IA and other stake holders;
• To assist the IA/ SPV in engagement of Business Development Services (BDS) providers, out sourcing/improving tools and equipment, developing strategies & best practices for credit linkage as far as possible;
• TA would advice IA/CDE for making plans for procurement of raw materials along with various micro and macro level tools and machineries and other processes as identified and mentioned under DPR. Tools/Kits and Charkhas/Implements may also be distributed among artisans as a part of Cluster Level Intervention as per DPR. TA should assist the IA in establishing a proper, appropriate and transparent system duly examined and vetted by the Cluster Level Committee for distribution of tools/ kits/ charkhas/ implements among artisans;

d. Enrolling under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) which will offer a renewable one year life cover of ₹ 2 lakh to all savings bank account holders in the age group of 18-50 years, covering death due to any reason, for a premium of ₹ 330 per annum or as applicable.

e. Enrolling under the Pradhan Mantri Suraksha Bima Yojana (PMSBY) which will offer a renewable one year accidental death-cum-disability cover of ₹2 lakh for partial/permanent disability to all savings bank account holders in the age group of 18-70 years for a premium of ₹12 per annum per subscriber or as applicable.

f. Issue of Aadhaar based Identity card to artisans mentioning the benefits, privileges, rights as well as their specific responsibilities along with necessary undertakings in regard to the implementation of the programme.

g. The Atal Pension Yojana (APY) will focus on the unorganized sector and provide subscribers a fixed minimum pension of ₹1,000, ₹2,000, ₹3,000, ₹4,000 or ₹5,000 per month, starting at the age of 60 years, depe

h. Periodic training of Artisans.

i. Self Help Groups (SHGs) members may also be extended to these general and miscellaneous supports as extended to the artisans under Cluster Programme.

• TA shall assist IA/SPV in organizing and planning Business Development Strategies, buyer-seller meet and implementation of thematic intervention focusing on branding, e-marketing, new media marketing, innovation, research and development etc. for smooth running of Clusters.
• Assisting the SPV in mobilizing additional funds for the project. This would involve preparation of proposals under relevant schemes of the Government apart from tying up loans from the banks.
• TA shall facilitate linkages between the SPV and various other stakeholders, particularly the Government organizations, buyers and financial institutions.
• TA will plan out in consultation with NA to frame the training requirement of artisans and stake holders and grouping their requirements as per the need of the clusters. Accordingly, the TA will assist in the identification of training institutions will be done in defining the courses duration, fees and other necessary requirement as per the cluster.

• Assist the NA for seeking and obtaining approval if any from the State Governments/UTs before submission of DPR to the SSC for final approval;
• TA shall create appropriate system for online reporting of progress reports to Nodal Agency and to the Ministry of MSME on monthly and quarterly basis.
• Any other work assigned from time to time by the NA, Ministry of MSME, for timely completion of project, any changes in nature of intervention, any sorts of addition/alternation in the implementation programme, etc. that may come at any point of time during the project period should very well be considered by TA for execution without any additional cost.
• At the end of the Project, TA shall prepare proper documentation covering the entire activities, preparation of case studies and photo/video documentation along with an end-project report articulating the outcomes in terms of productivity and sales. Listing out the outcomes achieved against the targets fixed at the beginning of the project will also be done.
• Formulate an exit strategy for the IA and prepare a sustainability roadmap for the Cluster with a business plan for the next five years beyond the project duration.
• Empanelled TAs are permitted to identify suitable IA.
• TA shall have to act diligently to ensure compliance to all Rules and Regulations, as required for the proposals at the DPR stage in order to obtain final approval from the SSC.

The fee will be paid by the NA to the TA on per cluster basis; the scheme will encourage a success fee based model, linked to milestones achieved.

Implementing Agencies (IAs) would be

• 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), etc. with suitable expertise to undertake cluster development.

One IA will be assigned for only one cluster normally (unless it is an agency with State-wide coverage). However, in case IA proposes to set up more clusters, NAs to assess properly IA for its capability to set up additional cluster(s). The selection of IAs, based on their regional reputation and experience of working at the grass-roots level, will be done by the Nodal Agencies (NAs), on the basis of transparent criteria.

Private sector participation shall also be encouraged for the implementation of the cluster projects. Corporate entities can also take up projects directly by forming cluster-specific SPVs. Corporates and Corporate Social Responsibility (CSR) foundations with expertise in cluster development will be encouraged to participate as IAs. In the case where a private sector entity is the IA, it shall contribute at least 50% of the total project cost excluding the cost of land.

The role and responsibility of the IAs includes the following:

• Recruit a full-time CDE in order to ensure efficient implementation of the project. Selection of CDE must be made from 3 options viz.

1. a local capable & strongly acceptable CDE from among the beneficiary group,
2. grooming of an existing person from the group to become a good CDE and
3. an externally recruited CDE. Additional qualification, experience and expertise to be considered while selection of the CDE in line with the requirements of the project deliverables.

• In case of an external person is chosen as the CDE, a capable local person may be made the deputy to the CDE so that he is groomed to take up the responsibility once the regular CDE leaves the cluster after financial support is stopped.
• The IA would identify and arrange suitable land for the project.
• Implement various interventions as outlined in the approved DPR;
• Undertake procurement and appointment of contractors, when required, in a fair and transparent manner;
• The IA will enter into an agreement with the Nodal Agency for timely completion on cluster intervention and proper utilization of Government Grants;
• Operation & Maintenance (O&M) of assets created under the project by way of user-fee based model;
• Responsible for furnishing Utilization Certificates (UCs) and regular Progress Reports to Nodal Agency in the prescribed formats.
• Implementing Agency (IA) may select suitable empanelled Technical Agency (TA) to assist them in implementing the cluster project.

• The IA shall endeavor to increase participation of various other cluster stakeholders and institutions by forming a Cluster Advisory Group, preferably headed by the District Magistrate and with representation from PRIs, traditional industry enterprises, support service institutions, banks, etc. with the objective of fostering increased level of involvement of various cluster stakeholders and strengthening the implementation of the project.

a) Formation of SPV is mandatory to seek the final approval by IA. The purpose of SPV will be to develop and sustain the cluster after the project implementation period is over. A SPV will be formed for each cluster which may be any of the following entities:

• a Society registered under Societies (Registration) Act, 1860;
• a Co-operative Society under an appropriate statute;
• a Producer Company under section 465(1) of Companies Act, 2013 (18 of 2013);
• a Section 8 Company under The Companies Act, 2013 (18 of 2013);
• a Trust; or
• Any other legal entity, with the prior approval of SSC.

b) A SPV will be formed for each cluster with minimum 33% representation of artisans in the Governing body/Managing Committee, by whatever name it is called, except in case of Khadi Institutions (KIs) of KVIC being IA, since Khadi Institutions (KIs) are already deemed SPV & in KVIC model the role of SPV comes into play at the time of exit of IA, only.

c) In case the Panchayati Raj Institutions (PRIs) at the cluster level desires to be the IA, it can form an SPV ensuring that the cluster micro-enterprises/beneficiaries hold a minimum 33% of the total equity in the SPV’s governing body.

d) In case of private sector promoted SPVs the shareholding of the lead investor/private partner shall not normally exceed 50% of the total equity.

e) IA/SPV may deposit their share (10% or 5%, as the case may be) in a phased manner with minimum 25% amount in a single installment as per the satisfaction of NA. IA shall appoint a full-time executive, to be located in the cluster, which will act as the Cluster Development Executive (CDE), and shall be responsible for implementation of the project as per the approved DPR. The responsibilities of CDE shall include preparation and implementation of theAnnual Action Plans of the cluster, promoting linkages with professional institutions as well as local institutions including PRIs.

The financial assistance provided for any specific project shall be subject to a maximum of ₹ 8 (eight) crore to support Soft, Hard and Thematic interventions.

All Eligible Applicants who can to apply this scheme are Eligible Entities that offer Loans under SFURTI Scheme. These include:

• 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,
• Corporate and Corporate Social Responsibility (CSR) foundations with expertise to undertake cluster development

To apply for loan under SFURTI scheme, eligible entities/agencies/organizations are required to submit the proposal to the State Office, KVIC and the same is checked at the State Level and Zonal Level before submitting to the Scheme Steering Committee for final approval. – https://www.india.gov.in/spotlight/scheme fund-regeneration-traditional-industries-sfurti

The duration for the implementation of the project will be 3 years. This is the maximum time-frame under which the project has to be executed.

Engagement and appointment of TAs

• As a large number of clusters located in various parts of the country, need to be covered under the program in a time-bound manner; it is required to empanel as many technically competent cluster development organizations as possible, as a pool of Technical Agencies (TAs) to assist in the implementation of the projects.
• An Expression of Interest (EoI) will be published by the NA in leading national newspapers requesting for proposals. The TAs will be shortlisted by NA based on technical evaluation of their proposals, mostly in terms of-

1. Net worth of the organization;
2. Organizational experience in implementing projects of similar nature specially artisans and micro-enterprise based developmental initiatives;
3. Competence of personnel and team;
4. Geographical presence; and
5. Any other parameter as deemed fit by the NA/SSC.

• Based on the above criteria, TAs would be appointed and assigned to specific clusters. Any other eligible institution may approach the Ministry of MSME or any of the Nodal Agencies for enrolment as a TA and the SSC shall be the final authority for due approval of the proposal for appointing any institution with eligibility and competence. It may be noted that TAs will be grouped at the cluster level whereby a single TA can be assigned to multiple clusters, not exceeding 50 clusters per TA.

Approval from SSC

• The SSC shall be responsible for approval of the projects and monitoring of their implementation. There would be two-stage process for approval of the projects: In-principle approval and final approval.
• In- Principle Approval: In-principle approval for a project/cluster will be accorded by the SSC based on recommendation of NA and evaluation of the Preliminary Project Report (PPR) as submitted by the TA assigned to the cluster. The PPR should broadly cover the major features of the proposed project including baseline information, tentative interventions, proposed implementation framework and a list of potential IAs. Such In principle approval will be valid for a period of 6 months from the date of approval, and before that it is expected that the project would be ready for final approval. In case final approval is not accorded to the project, within 6 months, the in-principle approval will automatically lapse, unless it is specifically extended by the SSC.
• Final Approval: The project will be accorded final approval by the SSC subject to fulfillment of the following conditions:

1. Preparation of DPR with specific details of interventions with cost estimates and timelines;
2. Identification of IA and formation of project specific SPV;
3. Execution of shareholders agreement and other related agreements between the IA and the members; and
4. Arrangement of requisite land for construction of common facilities by the IA in terms of registered sale or lease deed in the IA‟s name.
5. Approval by the Secretary, Department of Industries and Commerce of the State Govt./Union Territories, who is the competent authority to issue the consent for setting up of the cluster before the DPR is put up for final approval by the SSC at the apex level.

• State Governments, District Administrations and local PRIs may be involved in the entire process of State level approval. This shall ensure the involvement of local administration for smooth implementation of the SFURTI programme at cluster level and helps in dovetailing of the schemes of the State and Central Governments to strengthen the local governance system at the cluster level. Through this process, the legal entity, constitution and existence of the IA are being confirmed and authenticated by the Government machinery to avoid any kind of duplication and non-existence of operatives resulting in gross misuse of precious public funds. The NA and TA shall have to act diligently in coordination with the respective State Governments to ensure timely approvals for the proposals at the DPR stage in order to obtain final approval from the SSC. As the total time provided for the valid project proposal in the DPR format after in-principle-approval is six months or 180 days, the projects must obtain the State level clearances within a maximum period of 3 months or 90 days from the date of in-principle approval

Pre requisites for Release of Funds

• Once the DSR/PPR is approved by MoMSME, the process for release of funds under soft-intervention would initiate after ensuring the following preparatory actions at the level of the Nodal Agency:-

1. The Implementing Agency and Technical Agency are appointed;
2. Action initiated for formation of SPV at the IA level;
3. Proposal for the Cluster gets in-principle-approval from the SSC.

Release of Funds to IA

• On obtaining final approval, a sanction order will be issued by NA and 1stinstallment for the hard intervention will be released by NA in the dedicated bank account opened in the name of the IA. Whereas release of fund by NA to IAs for soft-intervention shall be need-based and a part component of the same is released to the IA after in-principle-approval of the SSC, the following schedule will be adopted for release of scheme funds for hard interventions:

1. 1st instalment of 40% of the hard intervention as advance on IA arranging land;
2. 2nd instalment of another 40% on utilization of 2/3 of 1st instalment; and
3. Balance 20% as 3rd and final instalment.

IA shall ensure that the services of the facilities created under the Scheme are extended to the cluster in general, in addition to the member enterprises.

IA shall be responsible for O&M of assets created under the Scheme beyond the project duration. IA shall ensure that the users of these facilities pay for the services rendered, for the maintenance of the assets. In case of dissolution of IA/SPV within 10 years from the date of sanction of assistance by the Government under the Scheme, the assets created with such assistance shall be vested with the Government. The Memorandum of Association & Articles of Association of the SPV shall incorporate this condition. In case of deemed SPVs, the IA will furnish and undertaking to this effect.