An SFURTI project proposal or a Detail Project Report is one of the most important documents in the SFURTI Scheme. The project is implemented based on DPR, and the government considers the same when providing grants under SFURTI.

SFURTI is a scheme which assists traditional industries consisting of Khadi, Coir, Handloom and Handicraft based-industry by providing grants up to Rs.5 Crore.

In spearheading the cluster development project and acquiring grants from the Government, the Technical Agency has to prepare a Diagnostic Study Report (DSR) and submit the same for approval before the PSC.

The IA will assist Technical Agency and Nodal Agency in the preparation of the Diagnostic Study Report. The IA will bring and provide input on important data points for the cluster development project. These inputs are incorporated in the DSR and the same is submitted by the Technical Agency for approval before the Project Steering Committee. After approval of the DSR, it is then called Detailed Project Report (DPR). The Nodal Agency subsequently submits the same to the ministry of MSME for its consideration before the scheme steering committee (SSC).

The project proposal envisions all the nuts and bolts for cluster development. It features a detailed plan for the cluster and demonstrates the type of products, designs, market demand, and profit analysis for the cluster. It also features the projection of profits, the future business of the cluster after the exit of agencies, and project intervention under SFURTI.

Table of Contents

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Elements of an SFURTI Project Proposal (DPR or DSR)

Profile and Background of The Cluster

A cluster is an amalgamation of several components clubbed for manufacturing and generating sales for traditional industry products.

The proposal document will first mention the name of the cluster and the type of traditional industry product it will manufacture. It will be the brief profile of the cluster, which will also mention the names of the Implementing Agency, Nodal Agency and Technical Agency that will participate in the cluster development project.

Along with the cluster profile, the additional information about the cluster under the following heads must be featured:

Raw Material in Development of Project

The raw materials are a necessary part of the development of cluster products. The raw material must be a traditionally available material such as Bamboo, Coir, Cane and other widely sourced material.

The DPR should specifically mention the type of raw material, the location from where the raw material will be procured, the cost of acquiring the material and the quality of the raw material as per the standards required for production. It shall also mention the techniques of using the raw material for building finished products out of it.

However, the material must be available locally in the geographical location of the cluster.

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Products and Manufacturing

The profile will also include the type of products it will feature in its design. A detailed plan for the development of the Common Facility Center (CFC) for the cluster is written in the proposal document.

For the development of CFC, the location of the land, and machinery to be installed for production must be mentioned. The techniques that will be employed for the development of the product and the materials required for manufacturing and designing the product must be mentioned as well.

Additional details such as the images of the products should be published in the DPR.

Location of Cluster / Cluster Map

The proposal document must mention the location of the cluster. The location includes the name of the district as well as the village or panchayat. Additional details, such as the geographical features of the location and its surroundings including the topographical and geological data points and the availability of raw materials in the area should be mentioned as well.

A cluster map is to be featured in the project proposal pointing out the geographical location of the cluster in the district as well as the village map. The map graphic should point out the exact place where the cluster is situated.

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Demographics and Artisans’ Profile

The cluster proposal will also feature the local demographics of the various rural communities living in the district. The artisan profile is developed according to the local demographics of the area, wherein it will mention the number of communities living in the area. Within the demographical data, the number of artisans capable of working in the cluster and the participation according to General, SC, ST and OBC or other categories must be mentioned.

Is there a Market for the Cluster?

After defining the type of products and the manufacturing methods in the project proposal, the next part is the demonstration of the market projection of the cluster.

A detailed analysis of the cultural significance of the product and the use of the product in the social trend must be mentioned. Therefore, after identifying the trend of the products, the price of the products on such a basis is analysed, and the logistical requirements in approaching the markets are also described.

Thereafter, the project proposal will explain the method of transportation of the product to the regional, national, as well as international markets.

The marketing of the product is an essential part of cluster development. It should demonstrate the application of such methods for showcasing the products at events and exploring other channels grabbing the larger market share for the cluster products.

A SWOT analysis of the marketing strategy must be prepared wherein, a detailed analysis of the product such as the USP of the product, the consumer base for the product and the high points of the product has to be planned and reproduced in the document. By SWOT analysis, the cluster must find ways and means in overcoming the weaknesses and strengthen the marketability of the product.

Along with marketing, the document must feature a plan for acquiring capital and finances from different sources, such as banks or financial institutions for further sustainability of the cluster.

The cluster spending for reaching out to the markets determines the future sustainability of the cluster and earning profits for the artisans working in the cluster.

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A Detailed Profile of the Agencies in the SFURTI Project Proposal

Profile of Implementing Agency

The name of the implementing agency (IA), and the legal status of the IA, whether it is a company, a registered society or a Panchayati Raj institute spearheading the SFURTI project proposal must be mentioned in the IA Profile.

The profile should also mention the work experience of the IA specifically about working in the sphere of rural traditional industry.

Name of the person representing the IA and his or her designation. Along with the other executive members of the IA if it is a body corporate is added as well.

A detailed 3-year analysis of the financial background of the IA wherein, its primary source of income and the nature of employment it provides as well as financial records for the last 3 years is also required to be placed in the project proposal to state the financial capacity of the IA.

Profile of Technical Agency

A similar description of Technical Agency (TA) is also necessary to be placed in the project proposal. It must state the working profile of the technical agency and the area of expertise for the services it offers.

The nature of technical support it offers along with previous work experience in handling clients or partners in cluster development projects and other experience in setting up SFURTI clusters should be mentioned in DSR/DPR.

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Profile of Nodal Agency

The project proposal shall also mention a brief profile of the nodal agency involved in the cluster development project. It shall first mention the details of the nodal agency, such as the name of the nodal agency, the establishment year and the legal constitution of its incorporation.

The project proposal must state the work experience of the Nodal agency, particularly in providing support to the artisans in the traditional industry. It must particularly state in which traditional market sphere the nodal agency is working such as Khadi, Coir, handloom and handicraft etc.

It should also brief the past achievements of the Nodal Agency in organizing events, and skill development programs in safeguarding the traditional arts and crafts in the promotion of traditional arts and crafts.

Strategies for Implementing the SFURTI Project

A detailed strategy and planning are discussed in the proposal which describes the implementation of project interventions for setting up the cluster. A systematic procedure is laid down providing a brief overview of the nuts and bolts for establishing a cluster.

These interventions are planned after evaluating the goal of the project specifically looking at the local profile of the cluster, the demographic or skills of craftsmen and artisans in the cluster, the expected income from the cluster and the training-specific framework to be adopted.

The strategy should further explain the market potential of the finished product and the availability of the raw material in the manufacturing of the same. The growth prospect of the cluster on a per-year basis and the future expansion of the product in international markets will be mentioned.

Therefore, looking at the project objectives, a strategic framework is adopted with the framing of different levels of project goals:

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Strategy for Soft Intervention

This section of the project proposal will list all the activities and the cost of the soft intervention activities for the cluster. The soft intervention will include activities such as general awareness, counselling, motivation and trust building for the artisans. It will also include skill development programs, marketing promotion, design, and product development.

A table with the list of all activities is drafted along with the total cost of the project activity.

Strategy for Hard Intervention

Similar to Soft Intervention activities, Hard Interventions are also mentioned in the project proposal document. The Hard Intervention includes the setting up of the Common Facility Centre (CFC) which is formed by building an industrial shed and training facility for the cluster where artisans will make use of tools for manufacturing.

A detailed costing of setting up of the industrial shed and training facility is to be described, which includes the cost of the machine, the accessory equipment for the machine, the tools required for artisans in training, manufacturing and designing of final product and the cost of setting up of machines.

The process of procurement of the machines for hard intervention, working hours of the artisans in the CFC along with the cost associated etc are mentioned as well.

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Cost of the Project

After the determination of the Soft Intervention and Hard Intervention plan, a detailed cost estimate for the setting up of the project is made out.

The same details are placed in Annexure – I of the project proposal document representing the full details of the cost spending on the different activities for setting up the cluster.

Ways & Means for Acquiring Funds

After the estimation of the cost for the project, the details of acquiring funding for the project are written in the project proposal document. This includes grants for establishing the cluster in the location.

Under this head, the details of sources of funds, which include the grants under the SFURTI scheme (up to Rs 5. Crore), a contribution made by the State Government, funding raised by the Promoter group and its equity contribution, IA Contribution and whether raising of capital using debt by Bank or Financial Institution is described in detail.

The complete detail of the ways and means of acquiring funds for the cluster project is mentioned in Annexures II and III of the project proposal.

Calculation of IA and TA Fees

The IA and TA fees are thereafter, calculated for their involvement in the project which becomes part of the spending of the cluster.

As per the scheme, for calculating fees of IA, it will be 8% of the Hard Intervention or 20 lakhs (whichever is less) i.e. spent in setting up the cluster project. Similarly, for TA fees, it will be 8% of the Hard Intervention or 30 Lakhs (whichever is less) i.e. spent on the cluster project is paid.

Project Phasing: The Timeline for Reaching Project Goals

After the determination of the various costs of the project and the details of acquiring funds from various sources, a timeline is then featured in the project proposal.

The next phase of the project will further make projections in setting up and operation of the CFC for the cluster after completing the hard and soft intervention targets

The phasing shall also include the timeline for identifying the markets for generating sales after setting up CFC, the exit strategy of the IA and TA from the cluster and the transfer of assets to SPV functionaries.

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Tentative Business Plan of the Cluster

The tentative business plan prepares and assesses the business of the cluster according to production output, availability of the raw materials and the competency of the artisans for the cluster.

It also features the production capacity with which the cluster will function under the CFC during its initial years and will make an estimated growth projection for the cluster in the next few years.

It will also mention expected sales generated by implementing the business plan for different products manufactured in the CFC and a year-wise growth projection of the same, during its initial years of the function of the cluster and its expected growth for the next 5 years.

It shall also mention the cost of production of using the raw materials and labour costs and what will be the margin for recovery of the cost from the sales of each product.

The covering of expenses including power, water and administrative expenses in the proper functioning of the cluster and the cost for setting up of Raw Material Bank and Working Capital projection for the next five years.

Expected Impact of the Cluster

Finally, a projection of the Impact of the cluster. The project proposal document should state the projected quantitative assessment of the products it will achieve by the interventions in managing the cluster.

It should state the projected increase in production in the CFC and the improvement in the skills of the artisans working in the cluster. There must also be an expected projection of the financial condition of the Cluster on receiving its support via linkages with Banks and other supporting Government or Non-Government institutions.

The expected impact should also feature the expected growth of an artisan income, the growing participation of artisans in the cluster, the projected sales growth for the next five years and the growing capacity of production in the CFC and control of SPV.

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Exit Strategy

The last piece of information in the project proposal is the finality of intervention under SFURTI and the exit strategy for IA and TA from the cluster. The exit strategy triggers the cluster or SPV into the road ahead to self-sufficiency.

The goal of an exit strategy, in a broader sense, is about the cluster’s “sustainability strategy” to ensure that the cluster sustains after the projection interventions end.

An exit strategy also ensures the completion of the program objectives and the achievement of targets projected in the Detailed Project Report.

It will mark the finality and execution of all MoUs and other such documents about the management of the infrastructure. However, there will be a provision for establishing a monitoring agency for looking after the progress and ensuring the terms and conditions of the MOU.


A Detailed Project Proposal or the SFURTI Project Proposal is the executive document which is not only used for obtaining grants from the government in setting up a cluster but also as a compliance document for the agency in establishing the cluster. The cluster has to be implemented according to the planned methodology in the project proposal and the business plan should comply with the targets featured in the document as well as in the Annexures of the DPR.