Zero defect

Zero defect

Why in the news?

The finance ministry has advised banks to support ZED-certified MSMEs

Details:

• The incentives that lenders are being advised to extend include concessional credit, lower loan processing fees and any other benefit that they deem appropriate.
• Lenders to ensure complete integration of the ZED portal with banks’s online portal

Concept:

MSMEs account for about 40% of the country’s exports, 6% of the manufacturing GDP and almost 25% of the services GDP.

ZED (zero defect, zero effect) certification

• It is granted by the MSME ministry to those eligible units that comply with certain sustainability standards to not harm the environment.
• Objectives:
  • The ZED Certification envisages promotion of Zero Defect Zero Effect (ZED) practices amongst MSMEs.
• Components:
  • Industry Awareness Programmes/Workshop: MSMEs will be made aware of the MSME Sustainable (ZED) Certification.
  • Training Programmes: on the MSME Sustainable (ZED) Certification to enable an effective implementation by partners
  • Assessment & Certification
  • Handholding: MSMEs will be provided handholding to help them achieve higher ZED Certification levels.
  • 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.
  • PR campaign, Advertising & Brand Promotion
  • Digital Platform: Certification process will be e-enabled through a single window digital platform.
• 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
• MSME can apply for any Certification Level if it feels that it can fulfill the requirements mentioned in each
• 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)
• Subsidy:
  • Under the Scheme, MSMEs get subsidy as per the following structure, on the cost of ZED certification:
    • Micro Enterprises: 80%
    • Small Enterprises: 60%
    • Medium Enterprises: 50%
  • A provision of up to Rs. 5 lakhs (per MSME) will be made available for handholding and consultancy support for MSMEs under ZED Certification for assisting them to move towards Zero Defect Zero Effect solutions.
  • The MSMEs can also avail themselves of several other incentives offered for ZED Certification by States & UTs, Financial Institutions etc. and can also apply for free Certification under the MSME KAWACH (COVID-19 Support) initiative.