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MSME Sustainable (ZED) Certification Scheme

Focus: GS III- Indian Economy (Effects Of Liberalization On The Economy)

Why in News? 

The  Union Ministry for Micro, Small and Medium Enterprises has launched the MSME Sustainable (ZED) Certification Scheme.

MSME Sustainable (ZED) Certification Scheme

  • This Scheme is a multi-pronged effort to help MSMEs embrace Zero Defect Zero Effect (ZED) practises.
  • Its goal is to encourage them to pursue ZED Certification while also encouraging them to become MSME Champions.
  • MSMEs may minimise waste, increase productivity, raise environmental awareness, conserve energy, make better use of natural resources, grow their markets, and more with the ZED Certification.

Components of the scheme

  • Under the Scheme, MSMEs will get subsidy as per the following structure, on the cost of ZED certification:
    • Micro Enterprises: 80%
    • Small Enterprises: 60%
    • Medium Enterprises: 50%
  • 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.
  • 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.
  • Further, a limited purpose joining reward of Rs. 10,000/- will be offered to each MSME once they take the ZED Pledge.

About ZED Scheme:

  • ZED or Zero Defect, Zero Effect  scheme is for MSME (Micro, Small and Medium Enterprises) Sector to increase the quality of products matching global standards.
  • The main objective of ZED or Zero Defect, Zero Effect  scheme  is to reduce the bad effect of products on the environment. This scheme will help contribute to the environment as well.
  • ZED Scheme aims to rate and handhold all MSMEs to deliver top quality products using clean technology.
  • It will have sector-specific parameters for each industry.
  • MSME sector is crucial for the economic progress of India and this scheme will help to match global quality control standards.
  • The slogan of Zero Defect, Zero Effect (ZED) was first mentioned by PM Narendra Modi in his Independence Day speech in 2014. 
  • It was given for producing high quality manufacturing products with a minimal negative impact on environment.
  • ZED Scheme is meant to raise quality levels in  unregulated MSME sector which is engine of growth for Indian economy.
  • The scheme will be cornerstone of the Central Government’s flagship Make in India programme, which is aimed at turning India into a global manufacturing hub, generating jobs, boosting growth and increase incomes


  • Develop an Ecosystem for Zero Defect Manufacturing in MSMEs. 
  • Promote adaptation of Quality tools/systems and Energy Efficient manufacturing. 
  • Enable MSMEs for manufacturing of quality products. 
  • Encourage MSMEs to constantly upgrade their quality standards in products and processes. 
  • Drive manufacturing with adoption of Zero Defect production processes and without impacting the environment. 
  • Support ‘Make in India’ campaign. 
  • Develop professionals in the area of ZED manufacturing and certification. 
  • Under the scheme, the MSME companies which follow the guidelines and meet the standards set by the ZED will award ZED certification along with several benefits.


November 2023