The government has expanded the support to artisans involved in agarbatti making as part of a programme aimed at making India self-reliant in the production of incensed sticks.

The MSME ministry had recently approved the ‘Khadi Agarbatti Atmanirbhar Mission’ towards creating employment for the unemployed and migrant workers in different parts of the country, hand holding artisans and supporting the local agarbatti industry. 

The Khadi and Village Industries Commission (KVIC), under the ministry of MSME, will implement the programme. The new guidelines were issued on September 4.

What are the changes in the scheme?

The total size of the programme has been increased to more than Rs 55 crore. Earlier, the size of the programme was of Rs 2.66 crore covering about 500 artisans.

It will include immediate support to about 1,500 artisans of about Rs 3.45 crore. 

Under the expanded programme, 400 automatic agarbatti making machines as against 200 earlier, and additional 500 pedal operated machines will be given to self help groups (SHGs) and individuals through 20 pilot projects, across the country with proper marketing and raw material supply tie-ups.

Will set up ‘Centers of Excellence’ at a cost of Rs 2.20 crore.

The four main pillars of the new programme are:

1) Continuously supporting the artisans through training, raw material, marketing and financial support.

2) Working on all aspects of this product, like innovation in the fragrance & packaging, use of new/alternate raw materials, supply of bamboo sticks by closely working with the ministry of agriculture. A ‘Center of Excellence’ for this purpose is being set up in Flavour and Fragrance Development Center, Kannauj.

3) Setting up of 10 clusters with proper marketing linkages under Scheme of Fund for Regeneration of Traditional Industries (SFURTI) at a cost of about Rs 50 crore, benefitting about 5,000 additional artisans.

4) Strengthening the machine manufacturing capability to achieve self-sufficiency in the country and develop various other products by setting up ‘Centers of Excellence’ with IITs/NITs.

These projects will give a boost to the agarbatti industry and help in further building indigenous capability in all areas of agarbatti manufacturing with increased exports, and enhanced employment opportunities to the artisans and entrepreneurs.

Agarbatti industry in India

The current consumption of agarbatti in the country is approximately 1,490  tonnes per day. However, per day production of agarbatti in India is just 760  tonnes. The deficit is met through imports primarily from China and Vietnam.

The import of raw agarbatti increased from 2 per cent in 2009 to 80 per cent in 2019. In monetary terms, the import of raw agarbatti in India increased exponentially from Rs 31 crore in 2009 to Rs 546 crore in 2019 due to reduction of import duty — from 30 per cent to 10 per cent — in 2011. 

This hit the Indian agarbatti manufacturers hard and resulted in closure of nearly 25 per cent of the total units.

In August, 2019, the government imposed restrictions on imports of agarbatti and other similar products amidst reports of significant increase in inbound shipments from countries like China and Vietnam.

It revived hundreds of agarbatti units in Maharashtra, Madhya Pradesh, Uttar Pradesh, Gujarat and several northeast states. It also prompted the local traders to import round bamboo sticks for manufacturing of raw agarbatti. This resulted in an increase in import of bamboo sticks from Rs 210 crore in 2018-19 to Rs 370 crore in the year 2019-20.

In June 2020, the Centre decided to increase import duty on bamboo sticks from 10 per cent to 25 per cent.

While 136 varieties of bamboo are found in India, the Bambusa Tulda variety — which is used for making agarbatti sticks — is abundant in the northeast region. 

What is SFURTI?

The Scheme of Fund for Regeneration of Traditional Industries (SFURTI) was launched by the MSME ministry in 2005 to promote cluster development.

As per the revised guidelines, the following schemes were merged into SFURTI:

* The Scheme for Enhancing Productivity and Competitiveness of Khadi Industry and Artisans.

* The Scheme for Product Development, Design Intervention and Packaging (PRODIP).

* The Scheme for Rural Industries Service Centre (RISC).

* Other small interventions like Ready Warp Units, Ready to Wear Mission, etc.

Objectives of SFURTI:

• Organise the traditional industries and artisans into clusters to make them, competitive and provide support for their long term sustainability.

• Provide sustained employment for traditional Industry artisans and rural entrepreneurs.

• Enhance marketability of products of such clusters by providing support for new products, design intervention and improved packaging and also the improvement of marketing Infrastructure.

• Equip traditional artisans of the associated clusters with the improved skills and capabilities through training and exposure visits.

• Make provision for common facilities and improved tools and equipment for artisans.

• Strengthen the cluster governance systems with the active participation of the stakeholders, so that they are able to gauge the emerging challenges and opportunities and respond to them in a coherent manner.

• Build up innovative and traditional skills, improved technologies, advanced processes, market intelligence and new models of public-private partnerships, so as to gradually replicate similar models of cluster-based regenerated traditional industries.

The scheme covers three types of interventions:

1) Soft Interventions: General awareness, counselling, motivation and trust building, skill development and capacity building, institution development, exposure visits, market promotion initiatives, design and product development, participation in seminars, workshops and training programmes on technology up-gradation, etc.

2) Hard Interventions: Creation of facilities such as multiple facilities for multiple products and packaging wherever needed, Common Facility centres (CFCs), Raw Material Banks (RMBs), Upgradation of production infrastructure, tools and technology upgradation, warehousing facility, training centre, value addition and processing centre.

3) Thematic Interventions: Cross-cutting thematic interventions at the sector level including several clusters in the same sector with emphasis on both domestic and international markets. These will primarily include brand-building and promotion campaigns, new media marketing, e-commerce initiatives and innovation.

The project outlay for various clusters:

Heritage cluster (1000-2500 artisans) - Rs 8 crore

Major cluster (500-1000 artisans) - Rs 3 crore

Mini cluster (Up to 500 artisans) - Rs 1.5 crore.

MSME ministry has constituted a Scheme Steering Committee as the apex coordination and monitoring body. The KVIC, Coir Board, NIMSME (Hyderabad), IED (Odisha), IIE (Guwahati), Institute of Management and Entrepreneurship Development, Pune, J&K KVIB are the nodal agencies for scheme implementation in their respective areas.

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