Ease of Doing Business for MSMEs: The MSME certification scheme Zero Defect, Zero Effect (ZED), launched by Prime Minister Narendra Modi in October 2016 to encourage the manufacturing of goods by MSMEs without any defects and without any effects on the environment had neared 25,000 MSME registrations. According to the data shared by MSME Minister Narayan Rane in Rajya Sabha during the current winter session, 23,948 MSMEs had registered in the erstwhile scheme with the intent to adopt the principle of the Zero Defect Zero Effect scheme. The scheme was upscaled in FY19 to benefit more MSMEs.
The scheme aimed at enabling MSMEs to use the latest technology to churn out quality products, enhancing competitiveness in manufacturing, and boosting exports. According to the MSME Ministry, ZED-certified MSMEs will act as credible and reliable vendors for companies investing in India, gain recognition from the government through an award-and-reward system, have leverage over non-ZED rated units, and more.
There are three stages of assessment of MSMEs to be ZED certified under five categories — Bronze, Silver, Gold, Diamond, and Platinum. The certification cost in grading is subsidised up to 80 per cent of the expenditure by the government and a Rs 5 lakh grant is given to interested MSMEs for improving their rating and adopting measures for moving towards zero effect. The fund allocated for the scheme in FY21 stood at 51.75 crore while expenditure was Rs 2.86 crore as of January 11, 2021, as per the MSME Ministry’s FY21 annual report.
Till FY21, 23,493 MSMEs were registered under the ZED scheme since its inception. Over 13,000 MSMEs had started online self-assessments (OSAs), out of which 3,685 had completed the assessments, the annual report noted. Moreover, 1,053 had completed desktop assessment (evaluation of the online self-assessment by ZED assessors), and 546 MSMEs had paid fees for site assessment out of which 503 had completed it. Moreover, out of 503 MSMEs, 131 were granted Bronze certification, 132 received Silver certification, 62 received Gold certification. Diamond certification was awarded to only four MSMEs.