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ZED certification for MSMEs: Full form, benefits, and more

by | Jul 11, 2023 | MSME

ZED certification for MSMEs seeks to enhance the global competitiveness of small businesses by improving production standards while being environmentally conscious. The scheme seeks to give financial assistance to MSMEs to raise their product quality and adopt cleaner technology.

ZED certification for MSMEs

Table of Contents

In a world that is increasingly emphasising the importance of sustainable development, India has put forward several schemes to ensure sustainability among businesses. One such scheme tailored for MSMEs is the ZED certification scheme.

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ZED certification of MSMEs was proposed to help MSMEs reduce wastage substantially, enhance environmental consciousness, save energy and optimally use natural resources while increasing productivity.

What is ZED certification?

ZED certification scheme or going by the ZED full form: Zero Effect Zero Defect scheme, is an MSME scheme that was introduced to motivate MSMEs to adopt best practices in their business process that enhanced sustainability within their enterprises. This certification has global value and will help your international clients know that your firm is a sustainable enterprise.

What is ‘zero defect’ and ‘zero effect’?
Let us have a look at what zero effect and zero defect means. This is what the Prime Minister of India said about the scheme: “We should manufacture goods in such a way that they carry zero defect and that our exported goods are never returned to us. We should manufacture goods with zero effect that they should not have a negative impact on the environment”.Analysing the above statement, you can understand that zero defect means producing goods with zero defects at the same time producing goods with zero effects on the environment. This scheme sets the export quality standard for all export-worthy products.

A ZED certified MSME is a business which has passed the ZED assessment. This means that your business now has a ZED rating along with a certificate which will improve the global image of your products.

Benefits of ZED certification

Here are ZED certification benefits for MSMEs:

  • A joining reward of ₹10,000 will be given to MSMEs who have taken the ZED pledge. This money needs to be utilised within one year of taking the pledge. This reward should be used to apply for the certification.
  • There will be a certification subsidy for MSMEs on the cost of applying for each level:
  • Micro enterprises: 80%
  • Small enterprises: 60%
  • Medium enterprises: 50%
  • There will be an addional subsidy of 10% for the MSMEs owned by women/SC/ST entrepreneurs or MSMEs in NER/Himalayan/LWE/Island territories/aspirational districts.
  • There will be an addional 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.
  • Financial assistance up to 75% on the total cost of testing/systems/product certification with a ceiling of ₹50000
  • Financial assistance up to ₹3 lakh on technology upgrades for Zero Effect Solutions, pollution control measures and cleaner technology
  • Increase guarantee coverage of 85% under the Credit Guarantee Fund Trust Scheme for ZED certified MSMEs

Participating in ZED scheme

To participate in the scheme, you first must take the ZED pledge. This is a promise to uphold the principles of Zero Defect Zero Effect in all business processes. Once this pledge is taken MSMEs can apply for a ZED certification.

ZED certification has three levels:

  • Certification Level 1: Bronze
  • Certification Level 2: Silver
  • Certification Level 3: Gold

Each level has different parameters of judgement. MSMEs can apply for certification at any of these three levels.

An organisation applying for a particular certification level will be assessed on the following parameters:

  • Leadership
  • Swachh workplace
  • Occupational (workplace) safety
  • Measurement of timely delivery
  • Quality management
  • Human resource management
  • Daily works management
  • Planned maintenance and calibration
  • Process control
  • Product quality and safety (testing /certification)
  • Material management
  • Energy management
  • Environment management
  • Measurement and analysis
  • Supply Chain management
  • Risk management
  • Waste management (Muda, Mura, Muri)
  • Technology selection and upgrades
  • Natural resource conservation
  • Corporate social responsibility
For Bronze certification you will be judged based on parameters from leadership to quality management. For silver level parameters will be from leadership to measurement and analysis and for gold level all the above parameters are applicable.

Each of the above parameters is examined by the certifying authority based on five maturity levels. Each level corresponds to the existing state of systems and processes in the manufacturing unit which is being assessed. These levels range from

  • Learner – Level I
  • Beginner – Level 2
  • Organized – Level 3
  • Achiever – Level 4
  • World Class – Level 5

This is called a maturity model of assessment. A ZED rating is provided on the basis of the score from this assessment. The ratings provided in the maturity model are:

  • If the MSME’s score is above 2.2 and up to 2.5, then the rating is Bronze
  • If the MSME’s score is above 2.5 and up to 3.0, then the rating is Silver
  • If the MSME’s score is above 3.0 and up to 3.5, then the rating is Gold
  • If the MSME’s score is above 3.5 and up to 4.0, then the rating is Diamond
  • If the MSME’s score is above 4.0 and up to 5.0, then the rating is Platinum
  • In case an MSME scores 2.2 or lower, then no rating is provided

Visit the ZED portal to know more about the assessment framework of the three levels of ZED certification.

Eligibility for ZED scheme

All MSMEs registered with the Udyam registration portal of the Ministry of MSME will be eligible to participate in ZED certification.

How to apply?

You must first complete ZED registration and then swear your ZED pledge to start your application. Follow these steps to register:

  1. Go to https://zed.msme.gov.in/
  2. Scroll down to ‘Our initiatives’
  3. Click on the “Register Now’ button. This will take you to the login page
  4. Click on the Register under ‘New user registration’
  5. Keep you Udyam registration certificate and associated phone number ready to successfully login and apply

The ZED scheme seeks to promote manufacturing of quality products using the latest technology and tools, and to constantly upgrade MSME processes for achievement of high quality and high productivity with the least effect on the environment.

FAQs

What is the cost of ZED certification?

ZED certification has three levels and different levels have different costs for application:
  • Bronze - ₹10000
  • Silver - ₹40000
  • Gold - ₹90000

What is the validity period of Zed certificate?

Once you receive a certificate, it is valid for four years.

What is ZED rating for MSME?

Once you pick a certification level and apply for it, the assessment framework will give you a ZED rating based on several parameters. After these parameters are analysed MSMEs are scored from 1 – 5. You need to score above 2.2 to get certification.

Priyanka Babu


Author: Priyanka Babu

Priyanka is a seasoned content marketing professional with more than 6 years of experience crafting various forms of business and technology sector content. Her insightful writing tackles critical issues faced by small-scale manufacturing businesses. Priyanka’s clear and concise communication empowers businesses to make informed decisions and thrive in today’s dynamic business environment.