How ZED certificate is useful for MSME entrepreneurs?

The idea of the Government on the MSME sector has been to manufacture goods in the country with “zero defects” and to ensure that the goods have “zero effect” on the environment. That is to say that we should manufacture goods in such a way that they carry zero defects and that our exported goods are never returned to us. The 73rd National Sample Survey (NSS) data says 30% of the 63 million MSMEs in India are not registered. These entities tend to miss out on some growth opportunities. Standardisation can help bring the unorganised MSMEs into the formal economy.

MSME Sustainable (ZED) Certification therefore targets to promote Zero Defect Zero Effect (ZED) practices amongst MSMEs by enhancing the competitiveness of an MSME through assessment, handholding, managerial and technological intervention, etc. Further, it enables MSME enterprises to manufacture quality products using the latest technologies and constantly upgrade their processes for the achievement of high quality and high productivity with the least effect on the environment. It Increases public awareness of demanding Zero Defect and Zero Effect products through the MSME Sustainable (ZED) Certification; hence it is not just a Certification.

All MSMEs registered with the UDYAM registration portal (of the Mo-MSME) will be eligible to participate in MSME Sustainable (ZED) Certification and avail of the related benefits/incentives.

A major challenge for many MSMEs in adopting high-tech standards is the absence of technical expertise and capacity within their organisations. The implementation of high-tech standards requires a deep understanding of complex technologies and processes, which are not available to small businesses. Another difficulty is that many MSMEs are not fully aware of the existence or requirements of high-tech standards, as they do not have access to information, resources, competence, and guidance on compliance.

MSME Sustainable (ZED) Certification therefore targets to promote Zero Defect Zero Effect (ZED) practices amongst MSMEs by enhancing the competitiveness of an MSME through assessment, handholding, managerial and technological intervention, etc. Further, it enables MSME enterprises to manufacture quality products using the latest technologies and constantly upgrade their processes for the achievement of high quality and high productivity with the least effect on the environment. It Increases public awareness of demanding Zero Defect and Zero Effect products through the MSME Sustainable (ZED) Certification; hence it is not just a Certification.

The Zed certification Scheme emphasizes to be implemented in 2 Phases:

Phase 1: For Manufacturing MSMEs with UDYAM Registration. This phase will focus largely on maximizing the inclusion of manufacturing MSMEs and taking them through the journey of ZED.

Phase 2: Inclusion of Service Sector MSMEs. This phase will also strive to integrate those MSMEs (manufacturing and Service Sectors) who are registered under a State Government protocol/system but not on UDYAM. From this phase onwards, additional information regarding MSME operations/performance may be collected to create a National MSME Competitiveness Index. In Phase 2, it is also envisaged to provide funding to the ZED Certified MSMEs to obtain international certifications, as necessary for the international market, and further, make provisions to align ZED Certification with the international certifications for its global acceptance.

MSME Sustainable (ZED) Certification is available in 3 levels viz. Bronze, Silver, and Gold are based on well-defined parameters of Quality, Safety, Production, Cleanliness, Energy, Environment, and so on.

MSMEs will be given financial assistance/subsidy for obtaining a ZED Certification Level. An MSME unit will get a subsidy as per the following structure:

a) MSMEs will be given financial assistance/subsidy for obtaining a ZED Certification Level.

b) An MSME unit will get a subsidy as per the following structure, on the cost of certification:

              i. Micro Enterprises: 80%

              ii. Small Enterprises: 60%

              iii. Medium Enterprises: 50%

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.

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 the 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 in time before the expiry of the validity of their existing ZED Certification. Cost and subsidy will remain the same for the applied Level.

The Ministry of Micro, Small & Medium Enterprises provides Financial Assistance in Testing/Quality/Product Certification, Subsidy on Handholding Support, and Subsidy on Technology Upgradation for Zero Effect Solutions that are as under. 

1. The Ministry provides free (100% subsidy) ZED Certification for Women Owned MSMEs
2. For availing Testing OR Management Systems OR Product Certification, of up to 75% of the total cost of Certification, with the maximum ceiling of subsidy being Rs. 50,000/-.
3.  Under the International Cooperation (IC) Scheme Stall Charges are subject to a maximum of Rs.3.50 lakh or actual rent paid, whichever is lower, and Economy class airfare is subject to a maximum of Rs. 1.75 lakh or actual fare paid, whichever is lower.
4. Fright charges, actuals subject to a maximum of Rs. 50,000/- + Rs. 10,000/- per MSME unit and Fright charges for Latin American Countries, Rs. 75,000/- + Rs. 10,000/- per MSME for Latin American Countries.

A 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 period. This joining reward may be used by an applicant MSME only once while applying for a ZED Certification (Bronze, Silver, Gold). This joining reward will be valid only for 1 year after taking the ZED Pledge.

Contemplating the role of this sector in Employment generation, promotion of entrepreneurship, regional development, export promotion, innovation, reduction of income disparities, and support for large industries, the Government of India along with the Reserve Bank of India launched the following initiatives.

MSME Samadhaan,

Atmanirbhar Bharat,

Udyog Aadhaar,

 Mudra,

ZED scheme,

Make in India

Stand up India,

Startup India,

RAMP scheme

Udyam Assist Platform

The below schemes help businesses in the MSME sector and are expected to contribute largely to India’s economic growth.

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