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ZED or Zero Defect Zero Effect scheme is a new initiative launched by the Narendra Modi led central government. ZED scheme envisages promotion of Zero Defect and Zero Effect (ZED) manufacturing amongst MSMEs and ZED Assessment for their certification. In this article, we will describe the complete apply process for filling up Zero Defect Zero Effect Scheme online application / registration form.
Revamped ZED Certification Scheme
Ministry of Micro, Small and Medium Enterprises has launched a revamped Zero Defect Zero Effect (ZED) Certification Scheme. The first phase of this overhauled programme will focus on manufacturing MSMEs while the second would be for those MSMEs in the services sector. New ZED certification scheme can help MSMEs get easier access to capital. Revised ZED scheme will benefit MSME sector which contributes 30% to India’s Gross Domestic Product and 50% to the export from this country.
According to the new guidelines “MSMEs that have ZED certification will be eligible to get concessions on parcel special trains, as well as get preferences from credit bureaus and banks.” Banks have offered lower processing fee and some relaxation in the rate of lending to those MSMEs that have a ZED certification. There will also be some support in the risk assessment of these certified MSMEs.
Revised Eligibility Criteria for ZED Scheme
The MSME ministry has also reworked the eligibility criteria for certification under the scheme. The number of parameters required for a Gold category ZED certificate has been trimmed from 50 to 20. MSMEs that have existing certifications for a criterion will also be considered valid for qualifying parameters.
As of November last year, 23,948 MSMEs had registered with intent to adopt the principle of the ZED Scheme. This scheme is part of a drive to create awareness amongst MSMEs about Zero Defect Zero Effect (ZED) practices and motivate and incentivize them for ZED Certification while also encouraging them to become MSME Champions.
Zero Effect Zero Defect Scheme Details
The Zero Defect Zero Effect Scheme 2024 is for MSME (Micro, Small and Medium Enterprises) Sector to increase the quality of products matching global standards. The main objective of ZED (Zero Effect, Zero Defect) scheme is to reduce the bad effect of products on environment. While MSME sector plays a big role in the GDP of India, the scheme will help contribute to environment as well.
Financial Support to MSMEs in ZED Certification Scheme
Zero Defect Zero Effect Scheme 2024 envisages promotion of ZED manufacturing amongst MSMEs and ZED Assessment for their certification so as to:-
- Develop an Ecosystem for Zero Defect Manufacturing in MSMEs.
- Promote adaptation of Quality tools/systems and Energy Efficient manufacturing.
- Enable MSMEs for manufacturing of quality products.
- Encourage MSMEs to constantly upgrade their quality standards in products and processes.
- Drive manufacturing with adoption of Zero Defect production processes and without impacting the environment.
- Support ‘Make in India’ campaign.
- Develop professionals in the area of ZED manufacturing and certification.
ZED Certification Scheme Registration Process
The ZED Certification Scheme or Zero Defect Zero Effect Scheme is a 5 steps process which is mentioned below:-
Step 1: Firstly visit the online portal of ZED Scheme
STEP 2: Register free on ZED online portal using the valid (Indian) mobile number and email address.
Step 3: Online self-assessment on the ZED parameters followed by Desktop Assessment.
Step 4: Site-assessment, if selected on the basis of Desktop Assessment.
Step 5: Consultancy: Rated MSMEs will have the option to avail the service of an authorized ZED consultant for gap-analysis and handholding.
ZED Scheme Eligibility Criteria to Apply Online
The Scheme is open to all Micro, Small and Medium Manufacturing Enterprises throughout the country. The units should be registered with Ministry of MSME (Udyog Adhar Memorandum), DIC (EM-II) or with any other agency (Industry Association and Govt agency).
Under the scheme, MSME sector is urged to make products with “Zero Defect” and “Zero Effect” on the environment, thus improving the brand image of the country. The prime minister also asked the MSME sector to make products at par with global standards.
Under the scheme, the MSME companies which follows the guidelines and meet the standards set by the ZED will be awarded ZED certification along with several benefits.
Salient Features of Zero Defect Zero Effect Scheme
- At no participation fees, ministry will organise workshops, sessions, industry awareness programmes.
- Financial assisstance will be provided to the MSMEs in obtaining a ZED certification.
Subsidy in ZED Certification Scheme
The subsidy provided by the Government of India for Micro, Small & Medium Enterprises will be 80%, 60% and 50% respectively. There shall be an additional subsidy of 5% for MSMEs owned SC/ST/women and MSMEs located in NER and J&K for assessment & rating/re-rating/gap analysis/hand holding:-
- Assessment/Rating by empanelled Credit Rating Agencies/other Agencies valid for 4 years (Ministry of MSME will subsidize* 80% of Micro, 60% of Small, 50% of Medium Enterprises’ Certification Fee: average 70% of Fee) (Assessment Fee Rs. 10,000/-& Rs 80,000/- per enterprise respectively for Desktop Assessment and ZED rating Complete Assessment).
- Additional rating for Defence angle i.e. Defence ZED by empanelled Credit Rating Agencies/other Agencies valid for 4 years (Ministry of MSME will subsidize* 80% of Micro, 60% of Small, 50% of Medium Enterprises’ Certification Fee: average 70% of Fee) (Assessment Fee Rs. 40,000/- per enterprise.)
- Gap Analysis, Handholding, Consultancy for improving rating of MSMEs by Consultants through QCI/NPC, Field formations of O/o DC-MSME viz. MSME-DI, MSME-TC including its autonomous bodies, BEE etc. (Ministry of MSME will subsidize* 80% of Micro, 60% of Small, 50% of Medium Enterprises’ Consultancy charges: average 70% of Fee) (Hand holding charges Rs. 1.9 Lakh per enterprise whereas in case of MSMEs owned by SC/ST entrepreneurs additional support of Rs 10,000/- will be provided.)
- Re-Assessment/Re-Rating by Credit Rating Agencies & Other Agencies (Ministry of MSME will subsidize* 80% of Micro, 60% of Small, 50% of Medium Enterprises’ Certification Fee: average 70% of Fee) (Assessment Fee Rs. 40000/- per enterprise.).
Benefits of ZED certification
- Credible recognition of the industry for international customers seeking investment in India
- Streamlined operations and lower costs
- Superior quality, reduced rejection and higher revenues
- Increased environmental & social benefits
- Additional employment generation
- Other benefits as announced by the Government from time to time
The interested companies can apply online for the assessment and ZED certification of their products on the official website at zed.org.in. The ZED scheme guidelines can be checked at https://www.startupindia.gov.in/content/sih/en/government-schemes.html
More details such as scheme guidelines, assessment criteria and other details can be found on the official website of Zero Defect, Zero Effect scheme at the URL here – http://dcmsme.gov.in/schemes/clcs-tus/Operational_Guidelines_ZED.pdf