MSME Sustainable (ZED) Certification Scheme

Context

The Union Minister for Micro, Small and Medium Enterprises has launched the MSME Sustainable (ZED) Certification Scheme.

MSME Sustainable (ZED) Certification Scheme

• This Scheme is an extensive drive to enable and facilitate MSMEs adopt Zero Defect Zero Effect (ZED) practices.
• Aim: to motivate and incentivize them for ZED Certification while also encouraging them to become MSME Champions.
• Through the ZED Certification, MSMEs can reduce wastage substantially, increase productivity, enhance environmental consciousness, save energy, optimally use natural resources, expand their markets, etc.

 Components of the scheme

• Under the Scheme, MSMEs will get subsidy as per the following structure, on the cost of ZED certification-
• Micro Enterprises: 80%
• Small Enterprises: 60%
• Medium Enterprises: 50%
• 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.
• Further, a limited purpose joining reward of Rs. 10,000/- will be offered to each MSME once they take the ZED Pledge.

About ZED Scheme

• ZED is based on the principle of
• Zero Defect – Production mechanisms wherein products have no defects
• Zero Effect – Production processes that have no adverse environmental and ecological effects.
• The slogan of Zero Defect, Zero Effect (ZED) was first mentioned by PM in his Independence Day speech in 2014. 
• ZED or Zero Defect, Zero Effect scheme is for MSME (Micro, Small and Medium Enterprises) Sector to increase the quality of products matching global standards.

• The main objective of ZED or Zero Defect, Zero Effect scheme  is to reduce the bad effect of products on the environment. 
• This scheme will help contribute to the environment as well.
• ZED Scheme aims to rate and handhold all MSMEs to deliver top quality products using clean technology.
• It will have sector-specific parameters for each industry.
• The MSME sector is crucial for the economic progress of India and this scheme will help to match global quality control standards.
• It was given for producing high quality manufacturing products with a minimal negative impact on the environment.
• The ZED Scheme is meant to raise quality levels in the unregulated MSME sector which is the engine of growth for the Indian economy.
• The scheme will be cornerstone of the Central Government’s flagship Make in India programme, which is aimed at turning India into a global manufacturing hub, generating jobs, boosting growth and increase incomes

Significance for MSME Sector

• Export Competitiveness
• Domestic consumer base
• Improved profits
• Reduced costs
• Increased investments
• Awards and Recognition
• Environmental responsibility
• Boost to Startup Culture