ZED Registration

ZED Registration

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.

MSME Sustainable (ZED) Certification is an extensive drive to create awareness amongst MSMEs about Zero Defect Zero Effect (ZED) practices and motivate & incentivise them for ZED Certification while also encouraging them to become MSME Champions. Through the journey of ZED Certification, MSMEs can reduce wastage substantially, increase productivity, enhance environmental consciousness, save energy, optimally use natural resources, expand their markets, etc. MSMEs will also be motivated to adopt best practices in work culture, standardisation of products, processes, systems etc. in order to enhance their global competitiveness and sustainability. The ZED Certification aims at enhancing the competitiveness of an MSME through assessment, handholding, managerial and technological intervention etc., hence it is not just a 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 so as 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 international market and further, making provisions to align ZED Certification with the international certifications for its global acceptance.

The ZED Certification envisages promotion of Zero Defect Zero Effect (ZED) practices amongst MSMEs so as to:

• Encourage and enable MSMEs for manufacturing of quality products using 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 recognising 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

COMPONENTS

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

• Training Programmes: Stakeholders like the MSME Officers, Assessors and Consultants will be trained on the MSME Sustainable (ZED) Certification to enable an effective implementation by partners like QCI, BIS, NPC.
• 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.
• Handholding: MSMEs will be provided handholding to help them achieve higher ZED Certification levels and also towards technology upgradation for moving towards zero effect solutions/pollution control measures/cleaner technology.
• Benefits/Incentives: Graded incentives will be announced by the Ministry of MSME for MSMEs so as 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.
• PR campaign, Advertising & Brand Promotion: For popularizing the MSME Sustainable (ZED) Certification and brand promotion of ZED, a nation-wide publicity will be done.
• Digital Platform: MSME Sustainable (ZED) Certification process will be e-enabled through a single window digital platform and minimum use of paper.

ZED CERTIFICATION LEVELS

MSME Sustainable (ZED) Certification can be attained in THREE Levels after registering and taking the ZED Pledge:

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

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

SUBSIDY ON COST OF CERTIFICATION

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.

1. MSMEs will be given financial assistance/subsidy for obtaining for a ZED Certification Level.
2. 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 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 of time before the expiry of validity of their existing ZED Certification. Cost and subsidy will remain the same for the applied Level.

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

CERTIFICATION PROCESS

ZED Certification can be attained on 3 levels after taking the ZED Pledge:

ZED Pledge

• Certification Level 1: BRONZE
• Certification Level 2: SILVER
• Certification Level 3: GOLD

1. After taking the ZED Pledge, an MSME can apply online for any Certification Level (Bronze, Silver, Gold) and would need to conform to all the requirements of the level applied for, in order to obtain the Certification.
2. Every MSME embarking on the journey of ZED must submit an Undertaking.
3. In case of a non-conformity, the applicant MSME would be given an opportunity to close the non-conformity(ies), in a defined time period, in order to be eligible for the desired level/Certification.
4. The Final ZED Certificate will be issued based upon the findings and recommendation of the Accredited Assessment Agencies.

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.

GAP ANALYSIS & HANDHOLDING

MSMEs with minimum Bronze certification are eligible to apply for handholding support. A provision of up to Rs. 5 Lakhs (per MSME) has been made available for handholding and consultancy support for MSMEs under ZED Certification for assisting them to move towards Zero Defect Zero Effect solutions. Out of this, an amount upto Rs. 2 Lakhs to be utilized for handholding support (as needed) through consulting organizations and up to Rs. 3 Lakhs may be utilized towards technology upgradation for moving towards zero effect solutions/pollution control measures/cleaner technology. The utilization of the Financial Support of upto Rs. 3,00,000/- for moving towards zero effect solutions will be subject to Consultant’s recommendations, verification by respective MSME-DI and approval by the PMAC.

The Ministry will subsidize the handholding support and technology upgradation financial support for moving towards zero effect solutions, as follows:

• Micro Enterprises: 80%
• Small Enterprises: 60%
• 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 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.

SURVEILLANCE

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 & EXPIRY

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.

Benefits of ZED

• The ZED rated MSME will get 0.5% interest rate on the concession on loans
• The ZED rated MSME will also get 50% concession in processing fee
• The Government provides Rs.25 lakhs for adopting technology
• The Government provides Rs.25 lakhs for setting up of new ETP
• Rs.10 lakh for domestic patent and Rs.20 lakhs for international patent registration
• Rs. 5 lakhs for purchase of testing equipment
• Rs.10 lakhs for ZED certification and handholding
• Extra 80%, 60%, and 50% subsidy on the cost of ZED certification in addition to the subsidy provided by the Government of India

Note: These are specific incentives by the Government of India, State Governments and Banks.