Kurukshetra Magazine August 2022 - 2 | Monthly Yojana & Kurukshetra Magazine (English) - UPSC PDF Download

 Page 1


Kurukshetra      August  2022 17
he impact of industrialisation on lives 
and livelihoods is known to all. The more 
industrialised a country is, not only are 
the wages and employment higher but 
so are other parameters of human development 
such as housing, healthcare, education, financial 
inclusion, besides supporting infrastructure such 
as connectivity and transport. These benefits are 
not only limited to the citizens in urban areas, 
but also percolate to those living in rural areas. 
However, given that India is still predominantly 
an agriculture-based economy and majority of 
the population still resides in rural areas, rural 
industrialisation is the key to boosting rural income 
BS Purkayastha
The role of MSMEs is critical in rural industrialisation. MSMEs today provide employment to more than 111 million workers 
with around 63.4 million units across the country. We need to identify areas for developing rural hubs based on resources, 
markets and infrastructure, where MSMEs can flourish and ensure employment and income to rural youth.
Boosting Rural Income
and employment. As such it is obvious that for any 
rural industrialisation scheme to be successful it 
needs to have strong sustainable linkage with the 
agriculture sector. Agro-based industrialisation, 
which over a period of time shifts to the non-farm 
sector leveraging economies of scale can help 
here. A strong linkage between farm and non-farm 
sectors can augment rural incomes and create jobs 
in rural areas.
Multi-pronged strategies have been 
adopted by the Government of India to address 
rural poverty and improve the economic well-
being of the people in rural areas with the main 
T
Page 2


Kurukshetra      August  2022 17
he impact of industrialisation on lives 
and livelihoods is known to all. The more 
industrialised a country is, not only are 
the wages and employment higher but 
so are other parameters of human development 
such as housing, healthcare, education, financial 
inclusion, besides supporting infrastructure such 
as connectivity and transport. These benefits are 
not only limited to the citizens in urban areas, 
but also percolate to those living in rural areas. 
However, given that India is still predominantly 
an agriculture-based economy and majority of 
the population still resides in rural areas, rural 
industrialisation is the key to boosting rural income 
BS Purkayastha
The role of MSMEs is critical in rural industrialisation. MSMEs today provide employment to more than 111 million workers 
with around 63.4 million units across the country. We need to identify areas for developing rural hubs based on resources, 
markets and infrastructure, where MSMEs can flourish and ensure employment and income to rural youth.
Boosting Rural Income
and employment. As such it is obvious that for any 
rural industrialisation scheme to be successful it 
needs to have strong sustainable linkage with the 
agriculture sector. Agro-based industrialisation, 
which over a period of time shifts to the non-farm 
sector leveraging economies of scale can help 
here. A strong linkage between farm and non-farm 
sectors can augment rural incomes and create jobs 
in rural areas.
Multi-pronged strategies have been 
adopted by the Government of India to address 
rural poverty and improve the economic well-
being of the people in rural areas with the main 
T
Kurukshetra      August  2022 18
focus on increasing livelihood opportunities, 
empowering rural women, providing social safety 
net, skilling of rural youth, rural industrialisation, 
infrastructure development, reducing migration 
to urban areas in search of jobs, etc., through 
various programmes. The Ministry of Rural 
Development and the Ministry of Micro Small and 
Medium Enterprises (MSME) have been working 
in tandem to ensure that rural citizens do not 
lag behind their urban counterparts in accessing 
employment opportunities in their own towns and 
villages while harnessing the natural resources 
of the hinterland. Entrepreneurship and micro-
units are the hallmarks of rural industrialisation 
programmes in the non-farm sector for generating 
employment opportunities and thereby boosting 
rural incomes.
As such, the Village Industries Programme 
is broadly classified under seven groups for 
the purpose of implementation of the various 
programmes, which are as under:
i. Agro Based and Food Processing Industry 
(ABFPI)
ii.  Forest Based Industry (FBI)
iii.  Hand Made Paper and Fibre Industry (HMPFI)
iv. Mineral Based Industry (MBI)
v. Polymer and Chemical Based Industry (PCBI)
vi. Rural Engineering and Bio-Technology Industry 
(REBT)
vii. Service and Textile Industry.
Concurrently, the Mahatma Gandhi Institute 
for Rural Industrialisation (MGIRI) is working in 
following six verticals for strengthening rural 
industrialisation in micro and small industries 
sector through providing entrepreneurship 
development trainings, skill development 
trainings, quality testing, and guidance services.
i. Khadi and Textile 
ii. Bio Processing and Herbal 
iii. Rural Chemical Industries 
iv. Rural Craft and Engineering 
v. Rural Energy and Infrastructure 
vi. Management and Systems
The Government of India has been 
implementing various schemes/programmes 
through various Ministries/Departments for 
promotion of the above agro and rural industries 
in the country. Among them, the Scheme of Fund 
for Regeneration of Traditional Industries (SFURTI) 
and Prime Minister’s Employment Generation 
Programme (PMEGP) through Khadi and Village 
Industries Commission (KVIC) is of particular 
relevance. 
Following are the salient features of these 
schemes and how they are gradually changing 
the face of rural India, boosting rural employment 
opportunities and rural incomes.
SFURTI Scheme
The Ministry of Micro Small and Medium 
Enterprises (MSME) implements the Scheme of 
Fund for Regeneration of Traditional Industries 
(SFURTI) across the country with the view to 
organise traditional industries and artisans into 
clusters to make them competitive and increase 
their income. SFURTI clusters are of two types: 
Regular Cluster (500 artisans) with government 
assistance of up to Rs. 2.5 crore and Major 
Cluster (more than 500 artisans) with government 
assistance up to Rs. 5 crore. The timeframe for 
functionalisation of a SFURTI cluster since its 
approval is 12 months for a Regular Cluster and 18 
months for a Major Cluster. 
Under the scheme, traditional artisans and 
industries are organised into clusters to add value 
to their production and enhance their income by 
supporting them in:
• upgradation of infrastructure by developing 
Common Facility Centers (CFCs) with latest 
machineries and creation of Raw Material 
Bank,
• training and skill development of artisans, 
exposure visits, product development,
• developing new market linkages, including 
e-commerce tie ups,
• partnerships with institutes of eminence for 
creation of new designs, etc.
Since 2014-15 till 31-03-22, 498 clusters have 
been approved under SFURTI in the country with 
GoI assistance of Rs. 1,29,493 lakh benefitting 
2,87,159 artisans. The Ministry conducts regular 
assessment of the functional SFURTI clusters in 
respect of their profitability and marketability 
Page 3


Kurukshetra      August  2022 17
he impact of industrialisation on lives 
and livelihoods is known to all. The more 
industrialised a country is, not only are 
the wages and employment higher but 
so are other parameters of human development 
such as housing, healthcare, education, financial 
inclusion, besides supporting infrastructure such 
as connectivity and transport. These benefits are 
not only limited to the citizens in urban areas, 
but also percolate to those living in rural areas. 
However, given that India is still predominantly 
an agriculture-based economy and majority of 
the population still resides in rural areas, rural 
industrialisation is the key to boosting rural income 
BS Purkayastha
The role of MSMEs is critical in rural industrialisation. MSMEs today provide employment to more than 111 million workers 
with around 63.4 million units across the country. We need to identify areas for developing rural hubs based on resources, 
markets and infrastructure, where MSMEs can flourish and ensure employment and income to rural youth.
Boosting Rural Income
and employment. As such it is obvious that for any 
rural industrialisation scheme to be successful it 
needs to have strong sustainable linkage with the 
agriculture sector. Agro-based industrialisation, 
which over a period of time shifts to the non-farm 
sector leveraging economies of scale can help 
here. A strong linkage between farm and non-farm 
sectors can augment rural incomes and create jobs 
in rural areas.
Multi-pronged strategies have been 
adopted by the Government of India to address 
rural poverty and improve the economic well-
being of the people in rural areas with the main 
T
Kurukshetra      August  2022 18
focus on increasing livelihood opportunities, 
empowering rural women, providing social safety 
net, skilling of rural youth, rural industrialisation, 
infrastructure development, reducing migration 
to urban areas in search of jobs, etc., through 
various programmes. The Ministry of Rural 
Development and the Ministry of Micro Small and 
Medium Enterprises (MSME) have been working 
in tandem to ensure that rural citizens do not 
lag behind their urban counterparts in accessing 
employment opportunities in their own towns and 
villages while harnessing the natural resources 
of the hinterland. Entrepreneurship and micro-
units are the hallmarks of rural industrialisation 
programmes in the non-farm sector for generating 
employment opportunities and thereby boosting 
rural incomes.
As such, the Village Industries Programme 
is broadly classified under seven groups for 
the purpose of implementation of the various 
programmes, which are as under:
i. Agro Based and Food Processing Industry 
(ABFPI)
ii.  Forest Based Industry (FBI)
iii.  Hand Made Paper and Fibre Industry (HMPFI)
iv. Mineral Based Industry (MBI)
v. Polymer and Chemical Based Industry (PCBI)
vi. Rural Engineering and Bio-Technology Industry 
(REBT)
vii. Service and Textile Industry.
Concurrently, the Mahatma Gandhi Institute 
for Rural Industrialisation (MGIRI) is working in 
following six verticals for strengthening rural 
industrialisation in micro and small industries 
sector through providing entrepreneurship 
development trainings, skill development 
trainings, quality testing, and guidance services.
i. Khadi and Textile 
ii. Bio Processing and Herbal 
iii. Rural Chemical Industries 
iv. Rural Craft and Engineering 
v. Rural Energy and Infrastructure 
vi. Management and Systems
The Government of India has been 
implementing various schemes/programmes 
through various Ministries/Departments for 
promotion of the above agro and rural industries 
in the country. Among them, the Scheme of Fund 
for Regeneration of Traditional Industries (SFURTI) 
and Prime Minister’s Employment Generation 
Programme (PMEGP) through Khadi and Village 
Industries Commission (KVIC) is of particular 
relevance. 
Following are the salient features of these 
schemes and how they are gradually changing 
the face of rural India, boosting rural employment 
opportunities and rural incomes.
SFURTI Scheme
The Ministry of Micro Small and Medium 
Enterprises (MSME) implements the Scheme of 
Fund for Regeneration of Traditional Industries 
(SFURTI) across the country with the view to 
organise traditional industries and artisans into 
clusters to make them competitive and increase 
their income. SFURTI clusters are of two types: 
Regular Cluster (500 artisans) with government 
assistance of up to Rs. 2.5 crore and Major 
Cluster (more than 500 artisans) with government 
assistance up to Rs. 5 crore. The timeframe for 
functionalisation of a SFURTI cluster since its 
approval is 12 months for a Regular Cluster and 18 
months for a Major Cluster. 
Under the scheme, traditional artisans and 
industries are organised into clusters to add value 
to their production and enhance their income by 
supporting them in:
• upgradation of infrastructure by developing 
Common Facility Centers (CFCs) with latest 
machineries and creation of Raw Material 
Bank,
• training and skill development of artisans, 
exposure visits, product development,
• developing new market linkages, including 
e-commerce tie ups,
• partnerships with institutes of eminence for 
creation of new designs, etc.
Since 2014-15 till 31-03-22, 498 clusters have 
been approved under SFURTI in the country with 
GoI assistance of Rs. 1,29,493 lakh benefitting 
2,87,159 artisans. The Ministry conducts regular 
assessment of the functional SFURTI clusters in 
respect of their profitability and marketability 
Kurukshetra      August  2022 19
through various review meetings, visits to 
clusters, third party evaluation, etc. Based on the 
same, it has been observed that marketability and 
profitability of the clusters require special support 
due to the COVID-19 pandemic. To ensure the 
same, the Ministry has taken various initiatives 
like training on design development and product 
diversification to cater to the market demand, 
encouraging linkages with e-commerce portals, etc.
While the SFURTI scheme is applicable 
across the country, to expand the reach of the 
scheme across the country, special focus is given 
on proposals received from districts without any 
existing approved SFURTI cluster as well as those 
received from the Aspirational districts. The 
convergence of the SFURTI scheme with other 
welfare schemes of Ministries/Departments of 
Central and State Governments is encouraged. 
Though minimum wage for artisans is not 
specified under SFURTI, necessary initiatives are 
taken under the scheme to upskill the traditional 
artisans and provide them with infrastructural 
support to add value to their products, thereby 
increasing their income in a sustainable manner. 
The Implementing Agencies of the clusters are 
required to open bank accounts and provide 
general and health insurance to all artisans, thus 
ensuring financial inclusion and better health 
facilities for these workers.
Prime	 Minis t er ’ s	 Emplo ymen t	 Gener a tion	
Programme (PMEGP)
The Ministry of MSME is implementing 
the Prime Minister’s Employment Generation 
Programme (PMEGP) since 2008-09 through 
KVIC as nodal agency at the national level for 
generating self-employment opportunities in the 
country by setting up micro-enterprises in non-
farm sector, including cottage, khadi and village 
Industries units, thus helping traditional artisans 
and unemployed youth.
Under PMEGP , General Category beneficiaries 
can avail of Margin Money subsidy of 25 percent 
of the project cost in rural areas and 15 percent 
in urban areas. For Special Categories such as 
SC/ST/OBC/minorities/women/ex-serviceman/ 
physically handicapped /NER/Hill and Border 
areas, etc., the Margin Money subsidy is 35 
percent in rural areas and 25 percent in urban 
areas. Maximum project cost for manufacturing 
unit has now been raised from Rs. 25 lakh to Rs. 
50 lakh and for service sector it is now Rs. 20 lakh 
from the earlier Rs. 10 lakh. 
Since its inception, about 7.8 lakh micro 
enterprises have been assisted with a subsidy of 
Rs. 19,995 crore generating estimated sustainable 
employment for 64 lakh persons. The scheme has 
been successful in generating rural employment 
spread across various social categories. Around 
80 percent of the PMEGP units have been set up 
in rural areas and about 50 percent of the units 
have been set up by SC/ST/Women entrepreneurs. 
Out of the total units set up and margin money 
subsidy disbursed to the entrepreneurs under 
PMEGP Scheme, the average share of agro-based 
food processing industries (ABFPI) is 16 percent in 
respect of units set up and 20.30 percent in respect 
of margin money subsidy disbursed. 
Table 1: Target set and achievement under the PMEGP Scheme during the last four years
(Margin Money: Rs. in lakh)
Year Target Achievement
No. of Units 
assisted
Margin 
Money 
disbursed
Estimated 
Employment 
Generated
No. of 
Units 
assisted 
Margin 
Money 
disbursed
Estimated Employment 
Generated 
2018-19 72381 206880.00 579048 73427 207000.54 587416
2019-20 79236 239644.00 633888 66653 195082.20 533224
2020-21 78625 228968.52 629000 74415 218880.15 595320
2021-22 (as 
on 27.01.22)
92666 285000.00 741328 60180 185122.76 370840
Source: http://164.100.24.220/loksabhaquestions/annex/178/AU269.pdf 
Page 4


Kurukshetra      August  2022 17
he impact of industrialisation on lives 
and livelihoods is known to all. The more 
industrialised a country is, not only are 
the wages and employment higher but 
so are other parameters of human development 
such as housing, healthcare, education, financial 
inclusion, besides supporting infrastructure such 
as connectivity and transport. These benefits are 
not only limited to the citizens in urban areas, 
but also percolate to those living in rural areas. 
However, given that India is still predominantly 
an agriculture-based economy and majority of 
the population still resides in rural areas, rural 
industrialisation is the key to boosting rural income 
BS Purkayastha
The role of MSMEs is critical in rural industrialisation. MSMEs today provide employment to more than 111 million workers 
with around 63.4 million units across the country. We need to identify areas for developing rural hubs based on resources, 
markets and infrastructure, where MSMEs can flourish and ensure employment and income to rural youth.
Boosting Rural Income
and employment. As such it is obvious that for any 
rural industrialisation scheme to be successful it 
needs to have strong sustainable linkage with the 
agriculture sector. Agro-based industrialisation, 
which over a period of time shifts to the non-farm 
sector leveraging economies of scale can help 
here. A strong linkage between farm and non-farm 
sectors can augment rural incomes and create jobs 
in rural areas.
Multi-pronged strategies have been 
adopted by the Government of India to address 
rural poverty and improve the economic well-
being of the people in rural areas with the main 
T
Kurukshetra      August  2022 18
focus on increasing livelihood opportunities, 
empowering rural women, providing social safety 
net, skilling of rural youth, rural industrialisation, 
infrastructure development, reducing migration 
to urban areas in search of jobs, etc., through 
various programmes. The Ministry of Rural 
Development and the Ministry of Micro Small and 
Medium Enterprises (MSME) have been working 
in tandem to ensure that rural citizens do not 
lag behind their urban counterparts in accessing 
employment opportunities in their own towns and 
villages while harnessing the natural resources 
of the hinterland. Entrepreneurship and micro-
units are the hallmarks of rural industrialisation 
programmes in the non-farm sector for generating 
employment opportunities and thereby boosting 
rural incomes.
As such, the Village Industries Programme 
is broadly classified under seven groups for 
the purpose of implementation of the various 
programmes, which are as under:
i. Agro Based and Food Processing Industry 
(ABFPI)
ii.  Forest Based Industry (FBI)
iii.  Hand Made Paper and Fibre Industry (HMPFI)
iv. Mineral Based Industry (MBI)
v. Polymer and Chemical Based Industry (PCBI)
vi. Rural Engineering and Bio-Technology Industry 
(REBT)
vii. Service and Textile Industry.
Concurrently, the Mahatma Gandhi Institute 
for Rural Industrialisation (MGIRI) is working in 
following six verticals for strengthening rural 
industrialisation in micro and small industries 
sector through providing entrepreneurship 
development trainings, skill development 
trainings, quality testing, and guidance services.
i. Khadi and Textile 
ii. Bio Processing and Herbal 
iii. Rural Chemical Industries 
iv. Rural Craft and Engineering 
v. Rural Energy and Infrastructure 
vi. Management and Systems
The Government of India has been 
implementing various schemes/programmes 
through various Ministries/Departments for 
promotion of the above agro and rural industries 
in the country. Among them, the Scheme of Fund 
for Regeneration of Traditional Industries (SFURTI) 
and Prime Minister’s Employment Generation 
Programme (PMEGP) through Khadi and Village 
Industries Commission (KVIC) is of particular 
relevance. 
Following are the salient features of these 
schemes and how they are gradually changing 
the face of rural India, boosting rural employment 
opportunities and rural incomes.
SFURTI Scheme
The Ministry of Micro Small and Medium 
Enterprises (MSME) implements the Scheme of 
Fund for Regeneration of Traditional Industries 
(SFURTI) across the country with the view to 
organise traditional industries and artisans into 
clusters to make them competitive and increase 
their income. SFURTI clusters are of two types: 
Regular Cluster (500 artisans) with government 
assistance of up to Rs. 2.5 crore and Major 
Cluster (more than 500 artisans) with government 
assistance up to Rs. 5 crore. The timeframe for 
functionalisation of a SFURTI cluster since its 
approval is 12 months for a Regular Cluster and 18 
months for a Major Cluster. 
Under the scheme, traditional artisans and 
industries are organised into clusters to add value 
to their production and enhance their income by 
supporting them in:
• upgradation of infrastructure by developing 
Common Facility Centers (CFCs) with latest 
machineries and creation of Raw Material 
Bank,
• training and skill development of artisans, 
exposure visits, product development,
• developing new market linkages, including 
e-commerce tie ups,
• partnerships with institutes of eminence for 
creation of new designs, etc.
Since 2014-15 till 31-03-22, 498 clusters have 
been approved under SFURTI in the country with 
GoI assistance of Rs. 1,29,493 lakh benefitting 
2,87,159 artisans. The Ministry conducts regular 
assessment of the functional SFURTI clusters in 
respect of their profitability and marketability 
Kurukshetra      August  2022 19
through various review meetings, visits to 
clusters, third party evaluation, etc. Based on the 
same, it has been observed that marketability and 
profitability of the clusters require special support 
due to the COVID-19 pandemic. To ensure the 
same, the Ministry has taken various initiatives 
like training on design development and product 
diversification to cater to the market demand, 
encouraging linkages with e-commerce portals, etc.
While the SFURTI scheme is applicable 
across the country, to expand the reach of the 
scheme across the country, special focus is given 
on proposals received from districts without any 
existing approved SFURTI cluster as well as those 
received from the Aspirational districts. The 
convergence of the SFURTI scheme with other 
welfare schemes of Ministries/Departments of 
Central and State Governments is encouraged. 
Though minimum wage for artisans is not 
specified under SFURTI, necessary initiatives are 
taken under the scheme to upskill the traditional 
artisans and provide them with infrastructural 
support to add value to their products, thereby 
increasing their income in a sustainable manner. 
The Implementing Agencies of the clusters are 
required to open bank accounts and provide 
general and health insurance to all artisans, thus 
ensuring financial inclusion and better health 
facilities for these workers.
Prime	 Minis t er ’ s	 Emplo ymen t	 Gener a tion	
Programme (PMEGP)
The Ministry of MSME is implementing 
the Prime Minister’s Employment Generation 
Programme (PMEGP) since 2008-09 through 
KVIC as nodal agency at the national level for 
generating self-employment opportunities in the 
country by setting up micro-enterprises in non-
farm sector, including cottage, khadi and village 
Industries units, thus helping traditional artisans 
and unemployed youth.
Under PMEGP , General Category beneficiaries 
can avail of Margin Money subsidy of 25 percent 
of the project cost in rural areas and 15 percent 
in urban areas. For Special Categories such as 
SC/ST/OBC/minorities/women/ex-serviceman/ 
physically handicapped /NER/Hill and Border 
areas, etc., the Margin Money subsidy is 35 
percent in rural areas and 25 percent in urban 
areas. Maximum project cost for manufacturing 
unit has now been raised from Rs. 25 lakh to Rs. 
50 lakh and for service sector it is now Rs. 20 lakh 
from the earlier Rs. 10 lakh. 
Since its inception, about 7.8 lakh micro 
enterprises have been assisted with a subsidy of 
Rs. 19,995 crore generating estimated sustainable 
employment for 64 lakh persons. The scheme has 
been successful in generating rural employment 
spread across various social categories. Around 
80 percent of the PMEGP units have been set up 
in rural areas and about 50 percent of the units 
have been set up by SC/ST/Women entrepreneurs. 
Out of the total units set up and margin money 
subsidy disbursed to the entrepreneurs under 
PMEGP Scheme, the average share of agro-based 
food processing industries (ABFPI) is 16 percent in 
respect of units set up and 20.30 percent in respect 
of margin money subsidy disbursed. 
Table 1: Target set and achievement under the PMEGP Scheme during the last four years
(Margin Money: Rs. in lakh)
Year Target Achievement
No. of Units 
assisted
Margin 
Money 
disbursed
Estimated 
Employment 
Generated
No. of 
Units 
assisted 
Margin 
Money 
disbursed
Estimated Employment 
Generated 
2018-19 72381 206880.00 579048 73427 207000.54 587416
2019-20 79236 239644.00 633888 66653 195082.20 533224
2020-21 78625 228968.52 629000 74415 218880.15 595320
2021-22 (as 
on 27.01.22)
92666 285000.00 741328 60180 185122.76 370840
Source: http://164.100.24.220/loksabhaquestions/annex/178/AU269.pdf 
Kurukshetra      August  2022 20
In order to enhance the employment 
opportunities, Ministry of MSME has also 
introduced a scheme of second financial assistance 
for expansion/upgrading existing PMEGP/
MUDRA units. The second financial assistance for 
manufacturing units is up to Rs. 1 crore and for 
service/trading unit it is up to Rs. 25 lakh with 
subsidy of 15 percent for non-NER (North Eastern 
region) and 20 percent for NER and hilly states. 
As per guidelines of PMEGP scheme, 100 
percent physical verification of units is carried out 
through outsourced agencies after completion of 
24 months and before 36 months of setting up of 
units. It has been observed that on an average 
about 80 percent of PMEGP units are found 
working and the rest are either closed or not 
found existing at the original registered location.
Schemes Being Implemented by Coir Board
The Ministry of MSME through Coir Board, is 
implementing various schemes for improving the 
Coir industry in the country under the Umbrella 
Scheme ‘Coir Vikas Yojana’. Components of the 
scheme are as follows.
i.  Science and Technology
ii.  Skill Upgradation and Mahila Coir Yojana
iii.  Domestic Market Promotion
iv.  Export Market Promotion
v.  Trade and Industry Related Functional Support 
Services
vi. Welfare Measures – Coir Workers Group 
Personal Accident Insurance Scheme merged 
with Pradhan Mantri Suraksha Bima Yojana 
(PMSBY)
vii. Coir Industry Technology Upgradation Scheme 
(CITUS)
Besides the above, SFURTI (Scheme of Fund 
for Regeneration of Traditional Industries) and 
ASPIRE (A Scheme for Promotion of Innovation, 
Rural Industries and Entrepreneurship) are also 
implemented by Coir Board for promoting Coir 
Industry in the country.
The Ministry of MSME, through Coir Board, 
has successfully implemented Coir Udyami Yojana 
(CUY) in almost all the States. The CUY was started 
for implementation in the year 2015-16 and it was 
Table 2: The State-wise details of the percentage 
of PMEGP units engaged in manufacturing and 
service sector for 2020-21
S. 
No.
Name of the State Manufacturing Service
1 Chandigarh UT 65.26 34.74
2 Delhi 82.56 17.44
3 Haryana 92.47 7.53
4 Himachal Pradesh 86.18 13.82
5 Jammu & Kashmir 80.00 20.00
6 Ladakh (U.T.) 90.11 9.89
7 Punjab 56.76 43.24
8 Rajasthan 93.15 6.85
9 Chhatisgarh 90.40 9.60
10 Madhya Pradesh 91.03 8.97
11 Uttarakhand 91.13 8.87
12 Uttar Pradesh 93.20 6.80
13 Arunachal Pradesh 98.25 1.75
14 Assam 90.82 9.18
15 Manipur 89.19 10.81
16 Meghalaya 79.63 20.37
17 Mizoram 79.88 20.12
18 Nagaland 87.17 12.83
19 Sikkim 92.48 7.52
20 Tripura 85.61 14.39
21 And. & Nic. Island 87.82 12.18
22 Bihar 80.14 19.86
23 Jharkhand 88.90 11.10
24 Odisha 88.87 11.13
25 West Bengal 98.71 1.29
26 Goa 59.11 40.89
27 Gujarat 87.53 12.47
28 Maharashtra 94.83 5.17
29 Andhra Pradesh 90.88 9.12
30 Karnataka 85.33 14.67
31 Kerala 84.11 15.89
32 Lakshadweep 100.00 0.00
33 Pondicherry 88.57 11.43
34 Tamilnadu 88.69 11.31
35 Telangana 97.73 2.27
Total 84.78 15.22
Source: http://164.100.24.220/loksabhaquestions/
annex/178/AU1557.pdf
Page 5


Kurukshetra      August  2022 17
he impact of industrialisation on lives 
and livelihoods is known to all. The more 
industrialised a country is, not only are 
the wages and employment higher but 
so are other parameters of human development 
such as housing, healthcare, education, financial 
inclusion, besides supporting infrastructure such 
as connectivity and transport. These benefits are 
not only limited to the citizens in urban areas, 
but also percolate to those living in rural areas. 
However, given that India is still predominantly 
an agriculture-based economy and majority of 
the population still resides in rural areas, rural 
industrialisation is the key to boosting rural income 
BS Purkayastha
The role of MSMEs is critical in rural industrialisation. MSMEs today provide employment to more than 111 million workers 
with around 63.4 million units across the country. We need to identify areas for developing rural hubs based on resources, 
markets and infrastructure, where MSMEs can flourish and ensure employment and income to rural youth.
Boosting Rural Income
and employment. As such it is obvious that for any 
rural industrialisation scheme to be successful it 
needs to have strong sustainable linkage with the 
agriculture sector. Agro-based industrialisation, 
which over a period of time shifts to the non-farm 
sector leveraging economies of scale can help 
here. A strong linkage between farm and non-farm 
sectors can augment rural incomes and create jobs 
in rural areas.
Multi-pronged strategies have been 
adopted by the Government of India to address 
rural poverty and improve the economic well-
being of the people in rural areas with the main 
T
Kurukshetra      August  2022 18
focus on increasing livelihood opportunities, 
empowering rural women, providing social safety 
net, skilling of rural youth, rural industrialisation, 
infrastructure development, reducing migration 
to urban areas in search of jobs, etc., through 
various programmes. The Ministry of Rural 
Development and the Ministry of Micro Small and 
Medium Enterprises (MSME) have been working 
in tandem to ensure that rural citizens do not 
lag behind their urban counterparts in accessing 
employment opportunities in their own towns and 
villages while harnessing the natural resources 
of the hinterland. Entrepreneurship and micro-
units are the hallmarks of rural industrialisation 
programmes in the non-farm sector for generating 
employment opportunities and thereby boosting 
rural incomes.
As such, the Village Industries Programme 
is broadly classified under seven groups for 
the purpose of implementation of the various 
programmes, which are as under:
i. Agro Based and Food Processing Industry 
(ABFPI)
ii.  Forest Based Industry (FBI)
iii.  Hand Made Paper and Fibre Industry (HMPFI)
iv. Mineral Based Industry (MBI)
v. Polymer and Chemical Based Industry (PCBI)
vi. Rural Engineering and Bio-Technology Industry 
(REBT)
vii. Service and Textile Industry.
Concurrently, the Mahatma Gandhi Institute 
for Rural Industrialisation (MGIRI) is working in 
following six verticals for strengthening rural 
industrialisation in micro and small industries 
sector through providing entrepreneurship 
development trainings, skill development 
trainings, quality testing, and guidance services.
i. Khadi and Textile 
ii. Bio Processing and Herbal 
iii. Rural Chemical Industries 
iv. Rural Craft and Engineering 
v. Rural Energy and Infrastructure 
vi. Management and Systems
The Government of India has been 
implementing various schemes/programmes 
through various Ministries/Departments for 
promotion of the above agro and rural industries 
in the country. Among them, the Scheme of Fund 
for Regeneration of Traditional Industries (SFURTI) 
and Prime Minister’s Employment Generation 
Programme (PMEGP) through Khadi and Village 
Industries Commission (KVIC) is of particular 
relevance. 
Following are the salient features of these 
schemes and how they are gradually changing 
the face of rural India, boosting rural employment 
opportunities and rural incomes.
SFURTI Scheme
The Ministry of Micro Small and Medium 
Enterprises (MSME) implements the Scheme of 
Fund for Regeneration of Traditional Industries 
(SFURTI) across the country with the view to 
organise traditional industries and artisans into 
clusters to make them competitive and increase 
their income. SFURTI clusters are of two types: 
Regular Cluster (500 artisans) with government 
assistance of up to Rs. 2.5 crore and Major 
Cluster (more than 500 artisans) with government 
assistance up to Rs. 5 crore. The timeframe for 
functionalisation of a SFURTI cluster since its 
approval is 12 months for a Regular Cluster and 18 
months for a Major Cluster. 
Under the scheme, traditional artisans and 
industries are organised into clusters to add value 
to their production and enhance their income by 
supporting them in:
• upgradation of infrastructure by developing 
Common Facility Centers (CFCs) with latest 
machineries and creation of Raw Material 
Bank,
• training and skill development of artisans, 
exposure visits, product development,
• developing new market linkages, including 
e-commerce tie ups,
• partnerships with institutes of eminence for 
creation of new designs, etc.
Since 2014-15 till 31-03-22, 498 clusters have 
been approved under SFURTI in the country with 
GoI assistance of Rs. 1,29,493 lakh benefitting 
2,87,159 artisans. The Ministry conducts regular 
assessment of the functional SFURTI clusters in 
respect of their profitability and marketability 
Kurukshetra      August  2022 19
through various review meetings, visits to 
clusters, third party evaluation, etc. Based on the 
same, it has been observed that marketability and 
profitability of the clusters require special support 
due to the COVID-19 pandemic. To ensure the 
same, the Ministry has taken various initiatives 
like training on design development and product 
diversification to cater to the market demand, 
encouraging linkages with e-commerce portals, etc.
While the SFURTI scheme is applicable 
across the country, to expand the reach of the 
scheme across the country, special focus is given 
on proposals received from districts without any 
existing approved SFURTI cluster as well as those 
received from the Aspirational districts. The 
convergence of the SFURTI scheme with other 
welfare schemes of Ministries/Departments of 
Central and State Governments is encouraged. 
Though minimum wage for artisans is not 
specified under SFURTI, necessary initiatives are 
taken under the scheme to upskill the traditional 
artisans and provide them with infrastructural 
support to add value to their products, thereby 
increasing their income in a sustainable manner. 
The Implementing Agencies of the clusters are 
required to open bank accounts and provide 
general and health insurance to all artisans, thus 
ensuring financial inclusion and better health 
facilities for these workers.
Prime	 Minis t er ’ s	 Emplo ymen t	 Gener a tion	
Programme (PMEGP)
The Ministry of MSME is implementing 
the Prime Minister’s Employment Generation 
Programme (PMEGP) since 2008-09 through 
KVIC as nodal agency at the national level for 
generating self-employment opportunities in the 
country by setting up micro-enterprises in non-
farm sector, including cottage, khadi and village 
Industries units, thus helping traditional artisans 
and unemployed youth.
Under PMEGP , General Category beneficiaries 
can avail of Margin Money subsidy of 25 percent 
of the project cost in rural areas and 15 percent 
in urban areas. For Special Categories such as 
SC/ST/OBC/minorities/women/ex-serviceman/ 
physically handicapped /NER/Hill and Border 
areas, etc., the Margin Money subsidy is 35 
percent in rural areas and 25 percent in urban 
areas. Maximum project cost for manufacturing 
unit has now been raised from Rs. 25 lakh to Rs. 
50 lakh and for service sector it is now Rs. 20 lakh 
from the earlier Rs. 10 lakh. 
Since its inception, about 7.8 lakh micro 
enterprises have been assisted with a subsidy of 
Rs. 19,995 crore generating estimated sustainable 
employment for 64 lakh persons. The scheme has 
been successful in generating rural employment 
spread across various social categories. Around 
80 percent of the PMEGP units have been set up 
in rural areas and about 50 percent of the units 
have been set up by SC/ST/Women entrepreneurs. 
Out of the total units set up and margin money 
subsidy disbursed to the entrepreneurs under 
PMEGP Scheme, the average share of agro-based 
food processing industries (ABFPI) is 16 percent in 
respect of units set up and 20.30 percent in respect 
of margin money subsidy disbursed. 
Table 1: Target set and achievement under the PMEGP Scheme during the last four years
(Margin Money: Rs. in lakh)
Year Target Achievement
No. of Units 
assisted
Margin 
Money 
disbursed
Estimated 
Employment 
Generated
No. of 
Units 
assisted 
Margin 
Money 
disbursed
Estimated Employment 
Generated 
2018-19 72381 206880.00 579048 73427 207000.54 587416
2019-20 79236 239644.00 633888 66653 195082.20 533224
2020-21 78625 228968.52 629000 74415 218880.15 595320
2021-22 (as 
on 27.01.22)
92666 285000.00 741328 60180 185122.76 370840
Source: http://164.100.24.220/loksabhaquestions/annex/178/AU269.pdf 
Kurukshetra      August  2022 20
In order to enhance the employment 
opportunities, Ministry of MSME has also 
introduced a scheme of second financial assistance 
for expansion/upgrading existing PMEGP/
MUDRA units. The second financial assistance for 
manufacturing units is up to Rs. 1 crore and for 
service/trading unit it is up to Rs. 25 lakh with 
subsidy of 15 percent for non-NER (North Eastern 
region) and 20 percent for NER and hilly states. 
As per guidelines of PMEGP scheme, 100 
percent physical verification of units is carried out 
through outsourced agencies after completion of 
24 months and before 36 months of setting up of 
units. It has been observed that on an average 
about 80 percent of PMEGP units are found 
working and the rest are either closed or not 
found existing at the original registered location.
Schemes Being Implemented by Coir Board
The Ministry of MSME through Coir Board, is 
implementing various schemes for improving the 
Coir industry in the country under the Umbrella 
Scheme ‘Coir Vikas Yojana’. Components of the 
scheme are as follows.
i.  Science and Technology
ii.  Skill Upgradation and Mahila Coir Yojana
iii.  Domestic Market Promotion
iv.  Export Market Promotion
v.  Trade and Industry Related Functional Support 
Services
vi. Welfare Measures – Coir Workers Group 
Personal Accident Insurance Scheme merged 
with Pradhan Mantri Suraksha Bima Yojana 
(PMSBY)
vii. Coir Industry Technology Upgradation Scheme 
(CITUS)
Besides the above, SFURTI (Scheme of Fund 
for Regeneration of Traditional Industries) and 
ASPIRE (A Scheme for Promotion of Innovation, 
Rural Industries and Entrepreneurship) are also 
implemented by Coir Board for promoting Coir 
Industry in the country.
The Ministry of MSME, through Coir Board, 
has successfully implemented Coir Udyami Yojana 
(CUY) in almost all the States. The CUY was started 
for implementation in the year 2015-16 and it was 
Table 2: The State-wise details of the percentage 
of PMEGP units engaged in manufacturing and 
service sector for 2020-21
S. 
No.
Name of the State Manufacturing Service
1 Chandigarh UT 65.26 34.74
2 Delhi 82.56 17.44
3 Haryana 92.47 7.53
4 Himachal Pradesh 86.18 13.82
5 Jammu & Kashmir 80.00 20.00
6 Ladakh (U.T.) 90.11 9.89
7 Punjab 56.76 43.24
8 Rajasthan 93.15 6.85
9 Chhatisgarh 90.40 9.60
10 Madhya Pradesh 91.03 8.97
11 Uttarakhand 91.13 8.87
12 Uttar Pradesh 93.20 6.80
13 Arunachal Pradesh 98.25 1.75
14 Assam 90.82 9.18
15 Manipur 89.19 10.81
16 Meghalaya 79.63 20.37
17 Mizoram 79.88 20.12
18 Nagaland 87.17 12.83
19 Sikkim 92.48 7.52
20 Tripura 85.61 14.39
21 And. & Nic. Island 87.82 12.18
22 Bihar 80.14 19.86
23 Jharkhand 88.90 11.10
24 Odisha 88.87 11.13
25 West Bengal 98.71 1.29
26 Goa 59.11 40.89
27 Gujarat 87.53 12.47
28 Maharashtra 94.83 5.17
29 Andhra Pradesh 90.88 9.12
30 Karnataka 85.33 14.67
31 Kerala 84.11 15.89
32 Lakshadweep 100.00 0.00
33 Pondicherry 88.57 11.43
34 Tamilnadu 88.69 11.31
35 Telangana 97.73 2.27
Total 84.78 15.22
Source: http://164.100.24.220/loksabhaquestions/
annex/178/AU1557.pdf
Kurukshetra      August  2022 21
in force up to 2017-18. As part of rationalisation 
of the ongoing plan programmes of the Ministry 
of MSME, the CUY was subsumed in the Prime 
Minister’s Employment Generation Programme 
(PMEGP) during March, 2018. Though the CUY 
has been integrated with PMEGP, the Ministry 
had allocated funds under CUY for settling the 
spillover claims. During 2017-18 to 2020-21, an 
amount of Rs. 1,626.68 lakh has been utilised by 
the Board for releasing margin money subsidy for 
setting up of 689 coir units under the CUY. After 
integration of CUY with PMEGP, the Ministry has 
disbursed margin money subsidy under PMEGP for 
setting up of coir units during the year 2018-19 to 
2020-21.
Programmes under KVIC
In addition to the above, under Gramodyog 
Vikas Yojana (GVY), KVIC is implementing following 
programmes for promotion and development of 
traditional industries.
Bee-Keeping (Honey Mission): KVIC launched 
Honey (Bee) Mission in July, 2017 for promoting 
beekeeping and generating employment in the 
beekeeping potential states of the country.
Pottery Programme (Kumhar Sashaktikaran): 
Under this programme, KVIC identify the areas 
where clusters of traditional pottery workers 
are available and provide them training, electric 
pottery wheels and other tools like blunger, Pug 
Mill, etc.
Table 3: Funds (Rs. in crore) allocated and 
released under the above schemes 
Programme 2019-20 2020-21 2021-22#
Allocation
Released
Allocation
Released
Allocation
Released
Honey Mission 15.00 13.43 11.07 7.47 5.78 8.19
Kumbhar 
Sashaktikaran 17.00 13.53 18.61 18.95 6.02 0.60
#
up to 31.01.2022 Source: http://164.100.24.220/
loksabhaquestions/annex/178/AS125.pdf
Khadi Vikas Yojana (KVY): KVIC implements 
Khadi Vikas Yojana for the promotion and 
development of Khadi activities (KVI) in the country, 
through various components like Modified Market 
Development Assistance (MMDA), Interest Subsidy 
Eligibility Certificate (ISEC), Workshed Scheme for 
Khadi Artisans, etc. Under KVY , 4.97 lakh Khadi 
artisans (spinners, weavers and others) are engaged 
in various Khadi activities, out of which 3.98 lakh 
artisans are women. Considering the present market 
demand and the effect of COVID-19 pandemic, 
KVIC has started online selling of all KVI products. 
KVI products are available online through www.
ekhadiindia.com and www.khadiindia.gov.in. KVIC 
has developed an online portal Khadi Institutions 
Registration and Certifications Sewa (KIRCS) for 
easier registration of new Khadi Institutions. 
Recently, an innovative product ‘Khadi Prakritik 
Paint’ has been launched by KVIC wherein any 
individual can set up an unit under PMEGP for its 
production. KVIC, through its 18 departmental and 
17 non-departmental training centres (Institutional 
and KVI Board), also conducts training programmes 
for youth for employment purposes.
Table 4: Total number of Khadi Institutions (KIs) 
operational in the country during the 
 last three years
Year Total number of  
Khadi Institutions
Upto 2018-19 2518
Upto 2019-20 2632
Upto 2020-21 2737
Operational as on Feb 2022 2816
Source: http://164.100.24.220/loksabhaquestions/annex/178/AU239.pdf
Table 5: Increasing trend in production and sale 
of KVI products during the last several years 
Particulars 2018-19 2019-20 2020-21
2021-22 
(as on 
31.12 
2021)
Production 
value of KVI 
products (Rs 
in cr)
58130.34 67667.31 72235.15 62504.29
Sale value of 
KVI products 
(Rs in cr)
74292.09 88875.54 95741.36 84405.16
Source: http://164.100.24.220/loksabhaquestions/annex/178/AU288.pdf
Through the Skill Development Programme 
(SDP) and Entrepreneurship Awareness 
Programme (EAP), KVIC, through its training 
centres, imparts skill development training to