MSMEs (Micro, Small and Medium Enterprises) are a significant contributor to the country’s socioeconomic development. In India, the sector has gained major importance due to its contribution to the Gross Domestic Product (GDP) of the country and exports. The sector has also contributed immensely with respect to entrepreneurship development, especially in semi-urban and rural areas of India. According to a report from IBEF (Indian Brand Equity Foundation). In FY21, the loan disbursals to MSMEs stood at Rs. 9.5 trillion (US$ 128.06 billion), a 40% increase compared with Rs. 6.8 trillion (US$ 91.66 billion) in FY20.
The Indian government introduced Zero Defect Zero Effect (ZED) Certification to ensure that the goods produced in the nation go through a seamless manufacturing process that yields products with “zero flaws” and a production method that has “zero impact” on the environment providing sustainable development. It helps MSME manufacturers scale up their businesses and maximise production output with reduced wastage.
ZED planning is mainly to promote two things that are “National Quality Mission '' and “Make in India” products and processes to ensure continuous improvement. More than 23,000 MSME businesses have already applied for ZED certification.
The Ministry of MSME launched the ZED scheme in 2016 for the manufacturing, and service sectors. The scheme includes a ZED maturity assessment model where the enterprises continuously strive to improve the business process in order to move up the model from Bronze, Silver, and Gold.
ZED mainly accounts for productivity, implementation of quality tools and manufacturing systems, increase in energy, financial efficiency, and improved human resource and technological depth including design and intellectual property rights in both products and processes. It also motivates MSMEs to upgrade their quality standards for products and processes on a regular basis.
All MSMEs registered with the UDYAM registration portal will be eligible to apply for ZED certification and avail of benefits related to it.
ZED Certification scheme has 3 rating levels - Bronze, silver, and Gold. MSMEs can apply for the certification level after registering and taking the pledge, depending on the quality of their manufacturing process. The certification will be given on the basis of a rating between 1 to 5 in the following manner.
To obtain Bronze Certification, an MSME has to meet the following requirements:-
To obtain Silver Certification, an MSME has to meet the following requirements:
To obtain Gold Certification, an MSME has to meet the following requirements:
MSMEs will get financial assistance/subsidy for obtaining a ZED Certification Level. The government has provided the following subsidies on the cost of certification under this scheme:
Additional Subsidy:
MSMEs can upgrade their Certification Level at any time before the validity of their existing ZED Certification expires. The cost and subsidy will be the same for the applied Level.
A limited-purpose joining reward of Rs. 10,000/- will be provided to each MSME once they take the ZED Pledge. This needs to be used within a defined time period for the purpose as per the following modalities:
The process of registration is as follows
The intent of taking a pledge is to take a “pre-commitment” or a solemn promise by MSMEs to uphold the values of Zero Defect Zero Effect in their practices and to urge them to move ahead on the journey of ZED.
“We undertake to conform to the values of Zero Defect Zero Effect in our enterprise and ensure that our processes shall be environmentally sound and socially responsible with safe and high-quality products. We will give back, in every way we can, to our people, our community and to our plant.” - ZED Pledge
MSMEs will get an opportunity to benchmark their systems and processes to learn the best practices across the globe. This also enhances global competitiveness giving visibility and brand recognition. ZED certification will encourage MSMEs to improve their performance and ease the business process with a reduction in defects and negative impact on the environment.
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