ZED Certification Scheme: In order to improve the competitiveness and productivity of MSMEs by helping them reduce wastage in their manufacturing process, enhance their environmental consciousness, save energy, and expand their markets, Prime Minister Narendra Modi in October 2016 had launched the voluntary Zero Defect, Zero Effect (ZED) scheme. To encourage more MSMEs to improve their manufacturing quality, the MSME ministry in April last year had revamped the scheme as the MSME Sustainable (ZED) Certification scheme with a lesser number of parameters to get certified as a manufacturer with zero defects in manufacturing goods and zero effect on the environment.
According to the annual report of the MSME ministry for the financial year 2022-23, over 26,000 MSMEs were registered under the scheme while 17 states or union territories had included ZED in their respective industrial policies and offered additional incentives to ZED-certified MSMEs, as of December 31, 2022. Moreover, 15 banks had notified incentives to ZED-certified MSMEs in the form of concessions in processing fees and rate of interest.
Also read: ZED scheme: This many MSMEs are ‘gold’ standard for sustainability in India
Here’s how Udyam-registered small businesses in manufacturing can get certification under the scheme and leverage related benefits:
How does the scheme work?
The scheme allows MSMEs to apply for ZED certification at three levels viz., bronze, silver and gold and are assessed respectively as per the parameters involved at every level. There are a total of 20 parameters, of which five are applicable for assessing bronze certification such as leadership, swachh workplace, workplace safety, measurement of timely delivery, and quality management.
Likewise for silver-level certification, the assessment is based on 14 parameters (including five parameters for bronze certification). These are HR management, daily works management, planned maintenance and calibration, process control, testing/certification of product quality and safety, material management, energy management, environment management, and measurement & analysis.
For gold certification, all 20 parameters are assessed including supply chain management, risk management, waste management, technology selection & upgradation, natural resource conservation, and corporate social responsibility including parameters for silver certification.
What is the cost of certification?
MSMEs would be charged Rs 10,000 for bronze certification, Rs 40,000 for silver certification, and Rs 90,000 for gold certification
What kind of support is available under the scheme?
According to the scheme’s details, the certification cost will be subsidized by 80 per cent for bronze-certified manufacturers, 60 per cent for silver-level MSMEs, and 50 per cent for gold certification holders. Moreover, there would be a joining reward of Rs 10,000 that would make bronze certification free.
An additional subsidy of 10 per cent would be provided to women/SC/ST-owned MSMEs or MSMEs in the northeastern region/Himalayan/Island territories/aspirational districts. An additional 5 per cent subsidy would be for MSMEs part of the government’s SFURTI scheme Micro & Small Enterprises – Cluster Development Programme (MSECDP).
Further, the scheme would provide financial assistance up to 75 per cent of the total cost of testing/certification, with the maximum ceiling of subsidy being Rs 50,000. Also, up to Rs 2 lakh support for handholding/consultancy will be offered in order to achieve the next certification level.
With respect to support in technology upgradation, the scheme would offer assistance up to Rs 3 lakhs for moving towards zero effect solutions/pollution control measures/cleaner technology.
Also read: Out of 500 MSMEs who got ZED certification, 300 are in Karnataka: MSME official Gopinath Rao
How to apply for the certification process?
- Visit zed.msme.gov.in and click on ‘Register Now’ under ‘ZED Certification’
- Validate with your Udyam registration number and mobile number linked to it and click on ‘Proceed’
- Select the plant unit for which you seek certification and click on ‘Confirm & Proceed’
- Enter your email ID, confirm your Unit Location and Associated Plant Activity and click on ‘Proceed to Pledge’
- Click on ‘I/We Pledge’ in the next window
- Your registration for the certification is successful. Click on ‘Go to Login’ to log in again with your ZED ID, password and the pledge certificate shared on your email ID
- Your pledge certificate will have your unit name and its address, Udyam number, date of taking the pledge, QR code and certification number
- Click on ‘Bronze Certification’ to apply for the bronze-level certification
- Accept the disclaimer and click on ‘Proceed’
- Share your GST and TAN number and click on ‘Apply Reward’ to avail of joining reward worth Rs 10,000 which will be deducted from your total cost of certification and then click on ‘Proceed to Pay’
- After payment, click on ‘Start Certification Process’
- Login again with your ZED id and password> click on My Certification> click on the right arrow under the Bronze Certification box
- Click on ‘Basic Information & Document Upload’ and then click on ‘Accept & Proceed’
- Click on ‘Submit’ in the next window and upload relevant documents, pictures, etc
- After the submission of documents, the request is allocated to the assessor for verification
- You will get the email for the submission of documents and information
- In case there are no issues found in the information submitted, the email carrying the assessment report and bronze certification will be shared via email
What is the validity of the joining reward?
This joining reward will be valid only for 1 year after taking the ZED Pledge
What is the validity of the certification?
The certificate will be valid for three years and the MSME will have to re-apply for the certificate as per the validity of the scheme
What about MSMEs in the services sector?
Currently, the scheme is applicable for manufacturing MSMEs only. The government hasn’t announced the scheme’s model for services MSMEs yet.
Subscribe to Financial Express SME (FE Aspire) newsletter now: Your weekly dose of news, views, and updates from the world of micro, small, and medium enterprises