SFURTI in Manipur: How Kauna Craft and Pottery Clusters Can Access Government Funding

The Scheme of Fund for Regeneration of Traditional Industries (SFURTI) is a key initiative from the Ministry of Micro, Small and Medium Enterprises (MoMSME) designed to revitalize heritage crafts. Instead of offering direct cash handouts to individual creators, the program infuses capital into organized artisan collectives. It provides substantial funding, offering grants up to INR 5 crore for regular clusters and scaling up to INR 8 crore for larger, major clusters.

For traditional craft communities across Manipur, such as the kauna (water reed) weavers in Kakching or the state’s distinct pottery makers, SFURTI offers a pathway to upgrade their operations. By forming or joining local clusters, these artisans can collectively set up shared production spaces known as Common Facility Centres (CFCs). The grant money goes toward buying advanced machinery, organizing design and technical training workshops, and building stronger regional marketing networks.

Because SFURTI focuses entirely on community-wide infrastructure, individual business needs are handled differently. Local entrepreneurs looking for direct personal credit, whether to cover day-to-day working capital or buy their own specialized tools, will need to look toward separate lending avenues, such as standard commercial business loans or flexible gold loans.

What Is SFURTI and What Does It Fund?

Introduced by the MoMSME in 2005, the Scheme of Fund for Regeneration of Traditional Industries (SFURTI) was established with a clear mission: to breathe new life into heritage crafts by organizing them into resilient, self-sustaining artisan clusters.

At the heart of the scheme is a collaborative, community-first philosophy. Recognizing that supporting individual artisans in isolation rarely creates lasting economic change, SFURTI pools resources into geographic groups practicing the same craft tradition. By funding the collective rather than the individual, the program enables entire communities to share the high costs of modern infrastructure, adopt advanced machinery, undergo professional skill development, and tap into broader commercial markets that would otherwise be out of reach for a single workshop.

Three types of interventions are funded under SFURTI:

A Common Facility Centre is the most impactful hard intervention: a shared workshop with machinery, finishing equipment, and quality testing tools that individual artisans cannot afford independently. For a kauna craft cluster, a CFC might house industrial drying equipment, quality-grading tools, and packaging machinery.

Key Funding Norms Under SFURTI

Note: For North Eastern Region states including Manipur, there is a 50% reduction in the minimum artisan count required per cluster. A regular cluster that would require 500 artisans elsewhere requires only 250 artisans in NER states. This provision substantially lowers the formation threshold for Manipur craft communities.

Note: Funding norms are subject to revision by MoMSME. Verify current guidelines at msme.gov.in before submitting a DPR.

SFURTI Clusters in Manipur: An Overview

Manipur has been a beneficiary of SFURTI funding across multiple craft sectors. Approved or active clusters in the state have included:

• Wood-based furniture cluster, Imphal East: Supported by an implementing agency focused on carpentry and furniture manufacturing in the Imphal East district
• Loin loom weavers cluster, Imphal West: Supported by the North Eastern Handicrafts and Handlooms Development Corporation, covering traditional Meitei and hill community weaving
• Lamka Spices Cluster, Churachandpur: Covering cardamom, ginger, and other hill spice producers in the Churachandpur district

Kauna (water reed) craft in Kakching and pottery in various districts represent emerging or eligible cluster categories that have not yet been brought under the formal SFURTI structure but meet the scheme's eligibility criteria for traditional industry classification.

Kauna Craft and Kakching Pottery: Why These Clusters Are SFURTI-Ready

Kauna Craft: Manipur's Indigenous Water Reed Industry

Deeply tied to the wetlands of Northeast India, Kauna (Eleocharis dulcis, commonly known as Chinese water chestnut or water reed) is an indigenous aquatic grass. It thrives naturally across the marshy wetlands of Manipur, particularly around the iconic Loktak Lake.

Local artisans harvest these wild stalks by hand, sun-drying them to achieve a flexible, golden-brown texture. Once seasoned, the reeds are woven into durable everyday items, including floor mats, storage baskets, functional handbags, home decor, and various household utilities.

This cottage industry serves as a crucial economic backbone in the region, sustained by women artisans across the districts of Bishnupur, Kakching, and the communities bordering Loktak Lake.

Kakching Pottery: A Tradition with Commercial Scale Potential

Kakching district in Manipur has a documented pottery tradition, with artisans producing earthenware using local clay and traditional kiln firing methods. The craft has an established artisan base and existing market channels through local retail and seasonal markets.

A SFURTI cluster for Kakching pottery would support: improved kiln infrastructure (gas or electric kilns replacing wood-fire kilns for more consistent output), clay preparation and conditioning equipment, glazing and finishing facilities, and marketing support including standardised product catalogues and online presence.

Both kauna craft and Kakching pottery satisfy the core SFURTI eligibility test: they are traditional industries with a grouped artisan base and clear scope for a shared Common Facility Centre that would produce collective productivity and quality gains.

Who Can Apply and How to Form a Cluster

Eligible applicants:

• Artisan self-help groups (SHGs)
• Co-operative societies of artisans
• Producer companies
• Trusts and registered societies with an artisan membership base
• Minimum 100 artisans for a mini or regular cluster in NER states (250 in general states); 500 for a major cluster in NER states

The role of an Implementing Agency (IA):

Individual artisans or artisan groups do not apply directly to SFURTI. The application is sponsored by an implementing agency: an NGO, government body, industry association, or institutions such as KVIC or the Coir Board, depending on the cluster's craft sector. The IA prepares the Detailed Project Report (DPR) and manages the project once funded.

Step-by-step application process for a new Manipur cluster:

1. Form an artisan group: Bring together at least 100 artisans (in Manipur's NER category) practising the same traditional craft in a defined geographic area.
2. Identify an Implementing Agency: Approach an NGO, KVIC, or a recognised institution willing to sponsor the DPR. The IA's track record matters to the scheme screening committee.
3. Prepare a Detailed Project Report: The DPR covers the cluster's artisan base, existing infrastructure, proposed CFC, machinery requirements, training plan, market linkages, and financial projections. This is the core document for scheme approval.
4. Submit through the SFURTI portal: The DPR is submitted at sfurti.msme.gov.in by the IA.
5. State-level screening and national approval: The proposal is reviewed by a state-level screening committee before being recommended for national-level Scheme Steering Committee approval.

For guidance specific to Manipur, the MSME Development Institute (MSME-DI) in Guwahati covers the North Eastern Region including Manipur and can advise on DPR preparation, implementing agency identification, and scheme requirements.

How Business Credit Connects to SFURTI Cluster Membership

SFURTI funds the cluster's shared infrastructure and collective activities. It does not provide individual working capital loans to artisans. Once a cluster is established and artisans register under Udyam (which SFURTI encourages as part of cluster formalisation), individual artisans gain access to formal lending channels that were previously unavailable to them.

Udyam registration, combined with documented cluster membership and a verifiable craft activity, strengthens an artisan's creditworthiness for formal business lending. A kauna craft artisan with Udyam registration, a track record of sales through the cluster's CFC, and documented income has a materially stronger loan application than an unregistered artisan with none of these.

For artisans who need quick working capital for raw material purchases, seasonal stock build-up, or equipment, a Gold Loan from IIFL Finance is the most accessible first option. Gold loans require only gold assets as collateral, minimal documentation, and disburse quickly, without requiring business vintage or turnover history. For artisans who have been operating formally for 12 or more months and need larger structured credit for expansion, IIFL Finance business loans are worth evaluating.

Disclaimer : The information in this blog is for general purposes only and may change without notice. It does not constitute legal, tax, or financial advice. Readers should seek professional guidance and make decisions at their own discretion. IIFL Finance is not liable for any reliance on this content. Read more