Will SFURTI yield fruits?
R. Gopalakrishnan
The Union government has unveiled a Scheme of Fund for Regeneration of Traditional Industries (SFURTI). Given the operational details of the scheme, it is clear that its success is far from assured, in the absence of elaboration of a theoretical framework behind its conception in the context of the contemporary domestic and global economic environment.
The scheme, to be funded by the Union Ministry of Rural and Agro Industries with a corpus of Rs 98 crores, relies heavily on a structure of new agencies to be created for financing and modernization of clusters of production traditional products, including khadi, coir, pottery etc. The notification of the scheme should have been accompanied by a summary of the experience gained by various agencies, including the Small Industries Development Bank of India (SIDBI) and the United Nations Industrial Development Organisation (UNIDO), in adopting/financing dozens of clusters across the country in the past few years and the lessons learnt and being incorporated in the new scheme.
Public-private partnership (PPP) is generally considered an important element in implementing development schemes, especially in India as a correction to the overcentralisation that had evolved and got entrenched during the decades of Central planning. The SFURTI, no doubt, relies on implementation through NGOs (non-government organizations) besides State governments, but the question that arises is whether there has been adequate preparatory work done to ensure smooth operation of the processes of identification, training and funding of NGOs – the various "agencies" that the SFURTI will bring about.
Defining a traditional industry as "an activity which produces marketable products, using locally usable raw material and skills and indigenous technology", the scheme is aimed at augmenting the "production, competitiveness and sustainable development" of the industries. It involves grants to the plethora of "agencies" implementing the scheme at clusters. A cluster itself is defined as one having a "geographical concentration of about 500 beneficiary families of artisans, microenterprises, suppliers of raw material, traders and business development service providers".
With a term of five years, the scheme aims at installing a "strong local government system of industrial clusters, with the active participation of local stakeholders, so that they are able to undertake development initiatives by themselves". A plethora of agencies have been conceived to enable financing, skill development, technology adoption, market intelligence and other tasks. Though the Central and State governments and their agencies are mentioned among the participants, there is little emphasis on the role and active participation of local bodies like village and town panchayats. The NGO component will include self-help groups (SHGs), artisan guilds and cooperatives.
At the apex of the SFURTI will the Scheme Selection Committee (SSC) comprising representatives of the government, the Indian Banks Association (IBA), NABARD, "cluster experts" and the Planning Commission. The next level mechanism will be the "nodal agencies" (NAs) including the Khadi and Village Industries Commission (KVIC) and the Coir Board, which will work with "implementation agencies" (IAs) which will be identified on the basis of "regional reputation and experience of working at the grassroot level" to be gauged by "transparent criteria to be approved by the Scheme Selection Committees (SSCs)".
The NAs, through the IAs, will identify "Technical Agencies" (TAs) having reputation and expertise in "cluster development methodology". The TAs will help NAs and IAs in identifying clusters and training "Cluster Development Agencies" (CDAs) for each cluster. To add to this list of agencies and functions, there will be cluster development coordination committees to be formed in each cluster and having representatives of targeted traditional industrial enterprises, support service institutions, banks, State governments etc.
The SFURTI will take over some self-employment and anti-poverty schemes being implemented by the Central government and some schemes of the KVIC insofar as the cluster areas are concerned.
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