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Zero Defect and Zero Effect (ZED) Scheme

Zero Defect and Zero Effect (ZED) Scheme

On August 15th, 2017, Prime Minister Modi called upon the industry, particularly the Micro, Small, and Medium Enterprises (MSMEs) in India, to produce goods within the country with “zero defects” while also ensuring that these goods have “zero effect” on the environment. This initiative was introduced recognizing the significant growth and importance of the MSME sector in the Indian economy over the last fifty years. The MSMEs serve as the largest employment providers and play a crucial role in maintaining regional balance across India.

About the Scheme

  • Zero Defect and Zero Effect (ZED) is a certification scheme for MSMEs.
  • Assess MSMEs for their processes to achieve zero defects in products and processes while emphasizing the human aspect.
  • The scheme also evaluates the environmental impact of MSMEs’ production processes.
  • Assessment involves three stages, culminating in certification across five categories: Bronze, Silver, Gold, Diamond, and Platinum.
  • The Government of India subsidizes up to 80% of the certification costs for MSMEs.
  • Financial assistance is provided for gap analysis, handholding, and consultancy to help MSMEs improve their ratings and adopt measures for zero effect.


  • Promote and implement ZED manufacturing processes in MSMEs.
  • Encourage continuous improvement in the sector to support the Make in India initiative.
  • Advocate for the adoption of quality tools and systems, promoting energy-efficient manufacturing.
  • Ensure MSMEs upgrade their tools and processes for better product outcomes.
  • Emphasize adherence to ZED protocol for minimal environmental impact.

Salient Features

  • The ecosystem of ZED schemes operates through a dynamic system with specific roles to fulfill in the future.
  • The maturity assessment model specifies the validity period for Rating and Certification. We integrate an inspection system into the model to align with all 25 sectors under the Make in India initiative.
  • The model also includes a reward system based on performance, offering both tangible and intangible benefits for outstanding achievements.
  • Motivation & Encouragement of MSMEs
  • Showcasing of high performing MSMEs
  • Success Stories
  • Benchmarking to International standards it is essential for the ZED ecosystem to collaborate for:
  • Cooperative Agreements
  • Knowledge Sharing
  • Propagating information to a foreign investor.


  • Reliable recognition of the industry for international customers seeking investment in India.
  • Elegant operations and lower costs.
  • Superior quality, reduced rejection and high revenues.
  • Increased environmental & social benefits.
  • Additional employment generation.
  • Other benefits as announced by the Government of India.


ZED scheme has been sponsored by:

  • Department of industrial policy and promotion (DIPP)
  • Ministry of commerce and industry of India
  • Quality council of India (QCI)
  • Ministry of MSMEs
  • MSMEs will have their assessment and rating determined based on 50 parameters, with applicants needing to fulfill 20 essential parameters and a minimum of 10 additional parameters. As a result, MSMEs will be rated on at least 30 parameters..
  • MSMEs have the option to seek ZED scheme rating on more than 30 parameters.
  • Each parameter has five levels.
  • Ratings are based on a weighted average level.
  • Companies should strive for higher levels in each parameter and are trained to do so.
  • Improvement in the rating model occurs as performance across parameters is elevated..


  • The ZED scheme will ignite global and domestic competition in the manufacturing sector, bolstering customer trust.
  • It aims to achieve the Make in India goals of elevating the manufacturing sector’s GDP contribution to 25% and generating 100 million jobs.
  • By enhancing MSMEs’ productivity and efficiency, the scheme will improve their cost competitiveness, leading to increased profits.
  • The ZED scheme will facilitate attracting investments, driven by global environmental awareness and the need for pollution control.

Read Also: List of Government Schemes 2023

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