ZED Certification Scheme

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ZED Certification Scheme An Introduction
As the MSMEs are amongst the strongest drivers of economic development, innovation and employment, it becomes imperative to strengthen their ecosystem. The Government of India envisioned the Zero Defect Zero Effect (ZED) initiative to enhance MSME competitiveness, make them sustainable and transform them as National and International Champions.

ZED Certification

This Scheme is proposed to be implemented in 2 Phases:
Phase 1: For Manufacturing MSMEs with UDYAM Registration. This phase will focus largely on maximizing 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.

Objectives of ZED Certification Scheme:
The ZED Certification envisages promotion of Zero Defect Zero Effect (ZED) practices amongst MSMEs to:
• Encourage and enable MSMEs for manufacturing of quality products using the 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 recognizing 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.

Process of ZED Certification Scheme:
ZED Certification can be attained on 3 levels after taking the ZED Pledge
• Certification Level 1: BRONZE
• Certification Level 2: SILVER
• Certification Level 3: GOLD

a) After taking the ZED Pledge, an MSME can apply online for any Certification Level (Bronze, Silver, Gold) and would need to comply or conform with all the requirements of the level applied for, in order to obtain the Certification.
b) Every MSME embarking on the journey of ZED must submit an Undertaking.
c) In case of a non-conformity, the applicant MSME would be given an opportunity to close the non-conformity, in a defined time period, in order to be eligible for the desired level/Certification.
d) The Final ZED Certificate will be issued based upon the findings and recommendation of the Accredited Assessment Agencies.
The Ministry of MSME reserves the right to visit & inspect any MSME after Certification, which has availed any subsidy, benefit or incentives under this Scheme.
The process flow and requirement for each level is highlighted in subsequent pages.

Components of ZED Certification Scheme:
1. Industry Awareness Programs/Workshop: MSMEs will be made aware of the MSME Sustainable (ZED) Certification through nation-wide awareness programs (online and/or face-to-face, as appropriate) with the assistance of stakeholders like Industry Associations, Implementing Agencies, MSME-DIs, District Industries Centers (DICs), Large Enterprises/OEMs, BEE.

2. Training Programs: Stakeholders like the MSME Officers, Assessors and Consultants will be trained on the MSME Sustainable (ZED) Certification to enable effective implementation by partners like QCI, BIS, NPC.

3. Assessment & Certification: MSMEs will be assessed (desktop verification, remote assessment, onsite assessment as applicable) and awarded relevant Certification Level for which they have applied for after fulfilling the requirements of that Level.

4. Handholding: MSMEs will be provided handholding to help them achieve higher ZED Certification levels and towards technology upgradation for moving towards zero effect solutions/pollution control measures/cleaner technology.

5. Benefits/Incentives: Graded incentives will be announced by the Ministry of MSME for MSMEs to motivate them to achieve higher ZED Certification levels. These incentives will also include assistance to MSMEs in their preparedness & response to COVID-19 pandemic, called MSME KAWACH (Knowledge Acquisition through WASH for an Accelerated COVID-19 Handling) which is based on the WASH (Workplace Assessment for Safety & Hygiene) Standard.

6. PR campaign, Advertising & Brand Promotion: For popularizing the MSME Sustainable (ZED) Certification and brand promotion of ZED, a nation-wide publicity will be done.
7. Digital Platform: MSME Sustainable (ZED) Certification process will be e-enabled through a single window digital platform and minimum use of paper.

ZED Certification Scheme Level:
MSME Sustainable (ZED) Certification can be attained in THREE Levels after registering and taking the ZED Pledge:
• Certification Level 1: BRONZE
• Certification Level 2: SILVER
• Certification Level 3: GOLD

1. 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).
2. Certification on WASH Standard & other capacity building measures through MSME KAWACH will be available to MSMEs immediately after taking ZED Pledge.
3. 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.

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

Subsidy in ZED Certification Scheme:
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:
I. Micro Enterprises: 80%
ii. Small Enterprises: 60%
iii. Medium Enterprises: 50%

Additional Subsidy:
1. 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.
2. 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 Program (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:
1. This joining reward may be used by an applicant MSME only once while applying for a ZED Certification (Bronze, Silver, Gold).
2. 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).
3. This joining reward will be valid only for 1 year after taking the ZED Pledge.

Surveillance for granting ZED Certification:
A surveillance assessment (after a period of 18 months of achieving ZED Certification) will be conducted by QCI’s Accredited Assessment Agencies as a part of the ZED Certification. The surveillance assessment will only be applicable to those MSMEs which have achieved Silver & Gold Certification levels.

The surveillance assessment will be conducted as a remote assessment for both Silver & Gold levels and the cost of the assessment will be as under:
• ZED Silver Level: Rs. 10,000/-
• ZED Gold Level: Rs. 20,000/-
The MSMEs will be given financial assistance/subsidy for the surveillance assessment as per the following structure:
1. Micro Enterprises: 80%
2. Small Enterprises: 60%
3. Medium Enterprises: 50%

Renewal After Expiry of ZED Certificate:
After the expiry of the validity of the ZED Certificate, MSMEs can go for Renewal of their ZED Certification level in order to continue availing associated benefits/incentives.

External Links

Frequently Asked Questions (FAQs):-

Question 1: What is the full form of Zed?
Answer- Zero Defect Zero Effect.

Question 2: Who is eligible for Zed certification?
Answer- All manufacturing sector MSMEs registered with the UDYAM registration portal.

Question 3: Is this only for the manufacturing sector?
Answer- Yes, now it is only for the Manufacturing Sector.

Question 4: What is Bronze, Silver, Gold?
Answer- This is the level of Certification.

Question 5: What is the cost of Zed certification?

Certification Level Government Fee Estimated Professional Fees*
1: BRONZE Rs. 10,000/- Rs. 15,000/-
2: SILVER Rs. 40,000/- Rs. 25,000/-
3: GOLD Rs. 90,000/- Rs. 50,000/-

* cost may vary for different service providers.

Question 6: Can we get any subsidy for this Scheme?
Answer- Yes, For Micro Enterprises: 80%, ii. Small Enterprises: 60% iii. Medium Enterprises: 50%
Also get Additional Subsidy for:
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.

Question 7: What is the limit of subsidy for MSME?
Answer- Margin Money subsidy ranges from 15% to 35% of project cost for projects up to Rs. 50 Lakh in Manufacturing sector.

Question 8: Is MSME registration free?
Answer- Yes

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