ZED

Addressing the nation on India's 68th Independence Day, Hon'ble Prime Minister Shri Narendra Modi urged the industry, especially the Micro, Small and Medium Enterprises (MSMEs) of India, to manufacture goods in the country with "zero defects" and to ensure that the goods have "zero effect" on the environment. With an aim to make India a global manufacturing hub, the Prime Minister gave an open invitation to manufacturers and investors across the world to establish manufacturing units in India. Ensuring competitiveness of India's MSME is critical as it will contribute to the overall growth of the manufacturing sector and the country's economy. International companies competing in global markets focus on their competitive strengths of costs acceptable to the market, technology, innovation, service delivery, lean manufacturing, and defect free products for Zero Defect and Zero Effect (ZED). It is hence prudent that we must quickly set the pace for the template of industrialisation and export fuelled growth to make a mark in global markets and improve our GDP.

Rationale:

The announcement of Make in India and Zero Defect Zero Effect put in perspective the governments’ intent to change the course of economy by focusing on manufacturing as an engine to sustained growth. In order to build the ecosystem to implement the idea, three important components emerged as the vehicle for this new transformation:

The Ease of Doing Business in India.
The confidence in quality of source material, components and services.
Making available competent human resource to drive the change.
While the DPIIT took the responsibility of creating an atmosphere of Ease of doing business, M/o MSME along with QCI, started exploring the idea of creating a holistic scheme to engage the MSME sector, long considered as a propellant for sustained growth, by improving their quality and competitiveness.
Objective:
Encourage and enable MSMEs for manufacturing of quality products using latest technology, tools & to constantly upgrade their processes for achievement of high quality and high productivity with the least effect on the environment
Develop an Ecosystem for ZED Manufacturing in MSMEs, for enhancing competitiveness and enabling exports
Promote adoption of ZED practices and recognising the efforts of successful MSMEs
Encourage MSMEs to achieve higher ZED Certification levels through graded incentives
Increase public awareness on demanding Zero Defect and Zero Effect products through the MSME Sustainable (ZED) Certification
Identify areas to improve upon, thereby assisting the Government in policy decisions and investment prioritization
Certification Levels:
Certification Level 1: BRONZE
Certification Level 2: SILVER
Certification Level 3: GOLD
Every MSME that embarks on the journey of ZED will have to take a “ZED Pledge” before applying for a ZED Certification Level (Bronze, Silver, Gold).
Certification on WASH Standard & other capacity building measures through MSME KAWACH will be available to MSMEs immediately after taking ZED Pledge.
After taking the ZED Pledge, the MSME can apply for any Certification Level if it feels that it can fulfil the requirements mentioned in each level. The intent of taking a ZED 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.
Subsidy on cost of Certification:
Any number of Units registered under one Udyam Registration can apply for subsidy under this Scheme. Each Unit (under one Udyam Registration) will need to apply for Certification separately to avail subsidy/benefits/incentives.
a) MSMEs will be given financial assistance/subsidy for obtaining for a ZED Certification Level.
b) An MSME unit will get subsidy as per the following structure, on the cost of certification:
Micro Enterprises:80%
SmallEnterprises:60%
Medium Enterprises: 50%
Additional Subsidy:
There will be an additional subsidy of 10% for the MSMEs owned by Women/SC/ST Entrepreneurs OR MSMEs in NER/Himalayan/LWE/Island territories/aspirational districts.
In addition to above, there will be an additional subsidy of 5% for MSMEs which are also a part of the SFURTI OR Micro & Small Enterprises - Cluster Development Programme (MSE-CDP) of the Ministry.
MSMEs may opt for upgrading their Certification Level at any point of time before the expiry of validity of their existing ZED Certification. Cost and subsidy will remain the same for the applied Level.
c) A limited-purpose joining reward of Rs. 10,000/- will be offered to each MSME once they take the ZED Pledge which needs to be utilized within a defined time period for the purpose defined as per the following modalities:
This joining reward may be used by an applicant MSME only once while applying for a ZED Certification (Bronze, Silver, Gold).
If the joining reward is used for any Certification, then the cost of the reward will be first deducted from the cost of Certification and then the Subsidy may apply if applicable. For example, if an MSME uses the reward for applying for Bronze Certification, the effective cost to MSME becomes zero, while in case an MSME applies for the Silver or Gold Certification, the reward amount will be adjusted in the Certification Cost and the subsidy will apply on the balance amount as per the type of the MSME (Micro, Small or Medium).
This joining reward will be valid only for 1 year after taking the ZED Pledge.