ZED Benefits to MSMEs

The Ministry of Micro, Small and Medium enterprises launched the ZED (Zero Defect Zero Effect) Scheme to motivate the entrepreneurs in manufacturing high-quality products and meet the demands of the national and global level customers. The main motto of the program is to boost entrepreneurship and support the Government’s ‘Make in India’ Scheme. The Ministry encourages the MSMEs rated under the ZED program with several awards and benefits, and some of its major benefits are elaborated in this article.

Internal Benefits to the MSMEs

The ZED Program brings in numerous advantages to the entrepreneurs for obtaining certification under the program, and some of them are as follows:

Department of MSME and Export Promotion chooses the best performing ZED MSME units and distributes the award and reward to them. In turn, the industry showcases talents globally.
It helps in enhancing the ecological balances and certify them as a Responsible Manufacturer.
ZED rated MSMEs can do extensive research through the ZED Certification Scheme and analyse the best practices carried out across the globe and implement it in their business.
ZED mark stamped on their products, leverages the trust and profit for their business.

Support from State Governments

In order to support the Central Government’s ZED program, several State Governments has volunteered to offer major benefits to the MSMEs as per their ratings under the program. They are as follows:

Punjab

For the enterprises expanding, modifying and upgrading to the higher level and the units that are registered under the ZED Certification Scheme and attain the maturity level of Bronze category within the 3 years from the date of commencement, the Government of Punjab disburses the following benefits:

A total subsidy of Rs.25 lakhs or an incentive of 50% of the total cost utilised for the upgradation of the latest technologies is provided.
A sum of Rs.5 Lakhs or the reimbursement cost of 50% is extended as a part of expenses incurred towards the installation of plant, machinery and testing equipment.
Reimbursement amount of Rs.2 Lakhs or 75% of the total cost expended on the energy audit is offered.
75% of the cost spent on the water audit or the maximum ceiling amount of Rs.1 Lakh is disbursed.
75% of the reimbursement cost expended on the safety audit or the maximum ceiling of Rs.1 Lakh
Maximum of 50% of the fixed capital cost equivalent to Rs.25 Lakhs is extended for setting up of new Effluent Treatment Plant.
Further to the Direct subscription up to 10% of the Public Issue, an amount of maximum of Rs.10 Lakhs is endorsed combined by the SIDBI, Nationalized Banks & the State Government subject
10% of the cost incurred for the Public Issue Expenses is disbursed subjected to Rs.2.50 Lakhs for the registration of National Stock Exchange.
The Government agency authorises the credit rating agencies with a 25% Reimbursement of the rating fee limited to a maximum of Rs.10,000 for Credit Rating borne by Micro and Small Enterprises.
For Domestic and International Patent Registration, reimbursement of 75% of the actual expenses that are limited to Rs.10 lakhs and Rs.20 lakhs, respectively.
For the total expenditure incurred in order to obtain the ZED certification certified by Quality Council of India with the limitation up to a maximum of Rs.10 lakhs or 100% reimbursement, whichever is applicable.
For the participation in the Punjab Pavilion Trade Fairs, the following benefits are offered.
50% of total rent that is limited up to Rs.10 lakhs for the participation of a minimum of 5 units abroad.
25% of total rent that is limited up to Rs.3 lakhs for Domestic Conferences and Trade Fairs.
A minimum 1% or a maximum of Rs.20 Lakhs per annum excluding the government fee and taxes on transportation of goods from manufacturer place of shipment is refunded for the Free on Board (FOB) value or actual freight, whichever is less.

Odisha

The Government of Odisha has volunteered to offer the following benefits for the ZED rated MSMEs:

80%, 60% and 50% of subsidy are extended to the Micro, Small and Medium enterprises respectively by the Central Government as a part of reimbursement on the cost of certification.
One-time reimbursement for the expenses incurred by the applicant MSME unit on the acquisition of Plant & Machinery/Testing equipment for obtaining ZED ratings in the following manner:
- For a fresh MSME applicant from “No Rating” status to achieve “ZED Bronze” status, 50% of expenses up to Rs.1 lakh incurred.
- For the MSME applicant from “ZED Bronze” status to achieve “ZED Silver” status, 50% of expenses up to Rs.2 lakhs.
- The MSME applicant from “ZED Silver” status to achieve “ZED Gold” status, 50% of expenses up to Rs.3 lakhs.
- The MSME applicant from “ZED Gold” status to achieve “ZED Diamond” status, 50% of expenses up to Rs.4 lakhs.
- The MSME applicant from “ZED Diamond” status to achieve “ZED Platinum” status, 75% of expenses up to Rs.5 lakhs.

Haryana

The State Government of Haryana has declared the following benefits for ZED rated MSMEs:

A 75% reimbursement or an amount of Rs.1 lakh of the total expenditure incurred for obtaining certification for obtaining ISO/HACCP/BSI/WHO-GMP/ZED/TS/ Hallmark certifications approved by Quality Council of India.
Zero Defect and Zero Effect: To adopt the ZED concept, the below-listed amount can be claimed by the ZED rated MSMEs:

1. A total amount of Rs.25 Lakhs or 50% of the cost spent on the Quality Certification, technology acquisition,
2. A total amount of Rs.25 Lakhs or 50% of the cost spent on patent registration

A total amount of Rs.5 Lakhs or 50% of the cost spent on the purchase of testing equipment

1. A total amount of Rs.25 Lakh or 50% of the cost spent on the technology upgradation and establishment of Effluent Treatment Plant.
2. Financial support of Rs.5 Lakhs per year is extended through the Credit Linked Interest Subsidy Scheme to the MSMEs as per their credit rating.

Gujarat

The State Government of Gujarat has declared the following for ZED rated MSMEs:

Assistance in quality certification
- Excluding the renewal charges, the amount incurred for the attaining the WHO GMP, Hallmark Certification others national and international certification approved by Quality Council of India (QCI), a 50% or a maximum of Rs.5 Lakhs is allotted to all the charges incurred.
- A 50% or a maximum amount of Rs.10 Lakhs is extended towards the cost incurred for the purchase of testing equipment and machinery required for quality certification that can be enchased.

Rajasthan

The Government of Rajasthan is offering the following benefits for ZED rated MSMEs:

Aid for Quality Certification

A total amount of Rs.3 lakhs or 50% of the expenses spent by MSMEs for obtaining quality certification from the registered entities approved by Quality Council of India such as ISI/BIS/WHO-GMP/Hallmark or other national and international Certifications is reimbursed.

Daman & Diu, Dadra & Nagar Haveli

The Government of Daman and Diu is extending the below mentioned fiscal incentives for the ZED rated MSMEs:

50% of the capital cost or the maximum ceiling amount of Rs.50,000 for the establishment of Enterprise Resource Planning (ERP)
The total amount of Rs.50,000 or 50% on the cost spent for the purpose of consultation, the total amount of Rs.50,000 for the purpose of obtaining ISO certification and a sum of Rs.5 Lakhs for obtaining ISI/WHO-GMP/Hallmark certifications and IPC, DD and DNH.
A sum of Rs.50,000 or 75% of the total cost spent on the energy/water audit performed by authorised institutions is compensated during the operation period of the scheme.
The total amount of Rs.20 Lakhs or 25% of the total cost expended for the procurement of the equipment proposed by the auditing authority to save energy and water is disbursed during the operative period of the Scheme.

Uttar Pradesh

The Government of Uttar Pradesh is offering the benefits to the ZED rated MSMEs as per the norms mentioned in the Uttar Pradesh’s MSME Policy 2017.

Tamil Nadu

EDII in collaboration with the National Productivity Council (NPC) is executing the ‘Lean Manufacturing Competitiveness Scheme’ (LMCS), National Institute of Design is launching the Design Clinic Scheme (DCS) as a part National Manufacturing Competitiveness Program (NMCP) Scheme to support the already functioning MSME clusters.

Support Rendered by the Banks

The Central Government of India encourages the public and private banks to accomplish the targets listed under the Program. Banks that are volunteered to offer benefits to the ZED rated MSMEs are as follows:

State Bank of India

State Bank of India (SBI) gives relaxations in the pricing structure and process fee for the MSMEs as per the following ZED ratings:

25% discount on the processing fee for the Gold ZED rated MSMEs
25% discount on the processing fee and 0.25% interest concession over the extant cards for the Diamond and Platinum rated MSMEs

Yes Bank

Yes bank provides a discount of 0.5% on the permissible Rate of Interest and 0.5% on Processing Fee for the ZED rated MSMEs. More details on ZED can be obtained from: MA Building, 3rd Floor, I P Estate, Ring Road, New Delhi - 110002, India ZED Certification: +91 9773500375/376 +91 9205739322 E-mail: zed@qcin.org Training Programme: +91 9870108495 +91 8802780074 +91 9810929834 zed-tp@qcin.org