Why is it in the News?

The Zero Effect, Zero Defect scheme (ZED) by the MSME Ministry, which aims to encourage environmentally sustainable manufacturing practices among MSMEs, has achieved the 1 lakh certification milestone

What is the Zero Effect, Zero Defect (ZED) Scheme?

• Launched in October 2016 and revamped in April 2022, the ZED scheme offers certification for environmentally conscious manufacturing under three certification levels (gold, silver and bronze) classified according to 20 performance-based parameters such as quality management, timely delivery, process control, waste management, etc.
• The scheme provides financial assistance of up to 75 per cent of the total cost of certification, with a maximum subsidy ceiling of Rs 50,000 along with up to Rs 2 lakh support for handholding/consultancy to achieve the next certification level.
  • For technology upgradation, the scheme offers assistance of up to Rs 3 lakhs for moving towards zero effect solutions/pollution control measures/cleaner technology.
• MSMEs are charged Rs 10,000 for bronze certification, Rs 40,000 for silver certification, and Rs 90,000 for gold certification.
• In December 2023, the MSME Ministry made the ZED scheme free for women-led MSMEs.
• In addition, the government will now make a guaranteed payment of 100 per cent financial support for the certification cost under the scheme.
• The ZED certification is valid for three years and the MSME units are required to re-apply for the certificate as per the validity of the scheme.
• Currently, the scheme is applicable for manufacturing MSMEs only.
• The government hasn’t announced the scheme’s model for services MSMEs yet.
• The scheme is in line with the government’s plan to reduce the country’s CO2 emissions by 1 billion tons by 2030, reduce carbon intensity below 45 per cent by 2030 and finally make way for achieving a Net-Zero emission target by 2070.
• The ZED Certification envisages the promotion of Zero Defect Zero Effect (ZED) practices amongst MSMEs so as to:
  • Encourage and enable MSMEs to manufacture quality products using the latest technology, and tools & to constantly upgrade their processes for the achievement of high quality and high productivity with the least effect on the environment.
  • Develop an Ecosystem for ZED Manufacturing in MSMEs, to enhance competitiveness and enable exports.
  • Promote the adoption of ZED practices and recognise the efforts of successful MSMEs.
  • Encourage MSMEs to achieve higher ZED Certification levels through graded incentives.
  • Increase public awareness of 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.