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Zero Defect Zero Effect

Given that MSMEs are key contributors to economic growth, innovation, and job creation, it is essential to bolster their ecosystem. The Government of India has introduced the Zero Defect Zero Effect (ZED) initiative aimed at improving the competitiveness of MSMEs, ensuring their sustainability, and positioning them as champions on both national and international stages.

The MSME Sustainable (ZED) Certification initiative is a comprehensive effort aimed at raising awareness among MSMEs regarding Zero Defect Zero Effect (ZED) practices. It seeks to motivate and incentivize these enterprises to pursue ZED Certification while also encouraging them to become MSME Champions.

Throughout the ZED Certification process, MSMEs have the opportunity to significantly reduce waste, boost productivity, increase environmental awareness, conserve energy, make optimal use of natural resources, and expand their market reach, among other benefits. Additionally, MSMEs will be encouraged to implement best practices in their work culture, standardize their products, processes, and systems to improve their global competitiveness and sustainability.

The ZED Certification is designed to enhance an MSME’s competitiveness through various means such as assessment, guidance, managerial support, and technological interventions, making it more than just a certification.

This scheme is planned to be rolled out in two phases:

Phase 1: For manufacturing MSMEs that have UDYAM registration. This stage will primarily concentrate on enhancing the inclusion of manufacturing MSMEs and guiding them through the ZED journey.

Phase 2: Incorporation of Service Sector MSMEs. This stage will also aim to include those MSMEs (from both manufacturing and service sectors) that are registered under a State Government protocol/system but are not listed on UDYAM. Starting from this phase, further information about MSME operations and performance may be gathered to develop a National MSME Competitiveness Index.

In phase 2, it is also planned to allocate funding to ZED Certified MSMEs to secure international certifications, as required for entering the international market. Additionally, measures will be taken to ensure that ZED Certification aligns with international standards for broader global acceptance.

Objective

The ZED Certification aims to promote Zero Defect Zero Effect (ZED) practices among MSMEs in order to:

  • Motivate and empower MSMEs to manufacture high-quality products utilizing the latest technologies and tools, while continuously enhancing their processes to achieve superior quality and productivity with minimal environmental impact.
  • Create an ecosystem for ZED Manufacturing within MSMEs to boost competitiveness and facilitate exports.
  • Encourage the adoption of ZED practices and acknowledge the achievements of successful MSMEs.
  • Inspire MSMEs to reach higher levels of ZED Certification through tiered incentives.
  • Raise public awareness about the demand for Zero Defect and Zero Effect products via the MSME Sustainable (ZED) Certification.
  • Identify areas for improvement, thus aiding the Government in making policy decisions and prioritizing investments.

ZED Certification Levels

The MSME Sustainable (ZED) Certification can be achieved in THREE Levels following registration and the completion of the ZED Pledge:

  • ZED Pledge
    • Certification Level 1: BRONZE
    • Certification Level 2: SILVER
    • Certification Level 3: GOLD
  • Every MSME that begins the ZED journey must take a “ZED Pledge” prior to applying for a ZED Certification Level (Bronze, Silver, Gold).
  • Certification based on the WASH Standard and other capacity-building initiatives through MSME KAWACH will be accessible to MSMEs right after they take the ZED Pledge.
  • Once the ZED Pledge is taken, the MSME may apply for any Certification Level if it believes it can meet the criteria outlined for each level. The purpose of taking the ZED Pledge is to make a “pre-commitment” or a serious promise by MSMEs to adhere to the principles of Zero Defect Zero Effect in their operations and to encourage them to progress on the ZED journey.

Eligibility

All MSMEs that are registered on the UDYAM registration portal (managed by MoMSME) will qualify to take part in the MSME Sustainable (ZED) Certification and receive associated benefits and incentives.