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Govt launches MSME sustainable (ZED) Certification scheme

  • 03-May-2022
Govt launches MSME sustainable (ZED) Certification scheme

Union Minister for Micro, Small, and Medium Enterprises (MSME) Narayan Rane launched Zero Defect, Zero Effect (ZED) Certification Scheme in October 2016. 


The Minister said that this scheme has the capability to become a national movement and it aims to offer a roadmap to the global competitiveness for the Micro, Small, and Medium Enterprises (MSME) of the country. 


This scheme is not attempted to improve performance and productivity but also has the potential to change the mindset of manufacturers & make them more aware of the environment.  


Through the journey of ZED Certification, Micro, Small, and Medium Enterprises can diminish the wastages substantially, enhance environmental consciousness, increase productivity, expand their markets, save energy, optimally use natural resources, etc.  


Components of the Scheme 

  • Handholding
  • Training program
  • Industry Awareness Programmes or Workshop
  • Assessment and Certification
  • Digital Platform
  • Benefits and Incentives
  • PR Campaign, Brand promotion, and Advertisement


Benefits of ZED Certification 

The certified MSMEs can avail a subsidy of up to Rs. 75,000 in airfares, up to Rs. 1 lakh install charges, and up to Rs. 25,000 in freight charges for participating in business exhibitions and fairs abroad & also eligible for the concessions in lower lending rates, processing fees of banks, and preferential lending facility. 


Under ZED Scheme, MSMEs units will get the subsidy as per the given structure, on the cost of ZED certification -  

Micro Enterprises  80% 
Small Enterprises  60% 
Medium Enterprises 50% 


There would be an additional subsidy of 10% for the Micro, Small, and Medium Enterprises owned by the SC, ST, or Women Entrepreneurs or MSMEs that are located in the Island territories, Himalayan, North Easters, and aspirational districts. 


Also, there will be an additional subsidy of 5% for the MSMEs units which are a part of the SFURTI or Micro and Small Enterprises – Cluster Development Programme of the Ministry (MSE-CDP) will be provided.  


The reward of Rs. 10,000 for limited purpose joining will also be provided to each MSME once they take the pledge for ZED.  


MSME sustainable certification can be attained in 3 levels after the registration and taking the pledge of ZED. 

  • Certification level 1 – BRONZE
  • Certification level 2 – SILVER
  • Certification level 3 – GOLD


Consultancy and Handholding support 

A provision of up to 5 lakhs will be offered for handholding and consultancy support for Micro, Small, and Medium Enterprises under the ZED certification for helping them to move towards the solution of Zero Defect Zero Effect. 


The MSMEs can also get many other incentives that are offered for the ZED certification by financial institutions, State and Union territories, etc. & also apply for the certification under MSME KAWACH (COVID-19) initiative. 


What are the other schemes initiated by the government to boost MSME sector? 


  1. Prime Minister's Employment Generation Programme (PMEGP)


The Indian government approved the introduction of credit linked subsidy program known as the Prime Minister’s Employment Generation Programme in 2008 for the generation of employment opportunities through the establishment of micro enterprises in both areas i.e., rural and as well as urban areas. 



PMEGP is a central sector scheme that was administrated by the Ministry of MSME. 


Implementing Agency at the National level 

Khadi and Village Industries Commission (KVIC) - The organization under administrative controls the Ministry of Micro, Small, and Medium Enterprises. 



It permits entrepreneurs to set up units or factories. 



  • The age of the borrower must be above 18 years of age.
  • Only units or new projects are considered for the sanction of a loan.
  • Self-help groups that are not having the benefits under any other scheme, charitable trusts, societies, and charitable trusts.


The maximum cost of the project 

Manufacturing sector Rs. 25 lakhs 
Service sector  Rs. 10 lakhs 


Government subsidy  

  • Rural areas
25% General category 
35% For special categories, such as SC, ST, OBC, Minorities, Border areas, NER, and Hill. 
  • Urban areas
15% General category 
25% For special categories  


Role of Banks  

Loans are offered by Regional Rural Banks, Public Sector Banks, Private Scheduled Commercial Banks, and Co-operative Banks approved by respective state task force committees. 


2. Scheme of Fund for Regeneration of Traditional Industries (SFURTI) 

Scheme of Fund for Regeneration of Traditional Industries (SFURTI) was established by the Ministry of MSME to encourage cluster development.  


 Khadi and Village Industries - It is the nodal agency for the promotion of Cluster development.  


Given below are the schemes that are being merged into SFRUTI: -  

  • The scheme for Enhancing Productivity and Competitiveness of Khadi Industry & Artisans.


  • The Scheme for Product Development, Packaging, and Design Intervention


  • The Scheme for Rural Industries Service Centre.


  • Many other interventions like Ready to Wear Mission, Ready Warp Units, etc.


Nature of Assistance  

The government offers financial assistance for a particular project depending on the cluster, a maximum of Rs. 5 crores. 

Type of cluster  Per cluster budget 
Regular cluster (up to 500 artisans) Up to Rs. 2.50 crores 
Major cluster (more than 500 artisans) Up to Rs. 5 crores 


Institutional Arrangements 

  • Scheme Steering Committee (SSC)
  • Nodal Agencies (NAs)
  • Technical Agency (TA)
  • Implementing Agency (IA)


Who can apply? 

  • Panchayati Raj Institutions
  • Non-Government Organizations
  • Field functionaries of State and Central Government
  • Institutions of Central and State government & semi-government institutions.
  • Private sector by forming cluster – Special Purpose Vehicles.
  • Corporate Social Responsibility and Corporate foundations have the expertise to undertake cluster development.


How to apply 

The eligible organizations and agencies must submit the proposal of KVIC, the State Office, and the same is to be included at the Zonal level and State level before submitting to the scheme for approval. 


3. A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE) 

A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE) was established in 2015 to set up incubation centers and a network of technology centers to accelerate & to promote startup of innovation. 


Components of ASPIRE scheme  

  • Livelihood Business Incubation (LBI)
  • Technology Business Incubation (TBI)
  • Start-up Promotion through Small Industries Development Bank of India (SIDBI)


Nature of Assistance  

ASPIRE  Provided by Amount  
For LBI 


  • NSIC - National Small Industries Corporation
  • KVIC - Khadi and Village Industries Commission
  • Coir Board
  • Any other institution or agency of the Indian Government
Up to Rs. 100 lakhs 
For incubation center under PPP 
  • NSIC - National Small Industries Corporation
  • KVIC - Khadi and Village Industries Commission
  • Coir Board
  • Any other institution or agency of the Indian Government
Up to Rs. 50 lakhs  

For incubation center under TBI 


  • ICRISAT - International Crops Research Institute for the Semi-Arid Tropics
  • Department of Science & Technology
  • Department of Biotechnology
  • ICAR - Indian Council of Agricultural Research
Up to Rs. 30 lakhs  


Objectives of ASPIRE Scheme 

  • Reduce unemployment and create new jobs.
  • Encourage entrepreneurship culture in India.
  • Encourage innovation to strengthen the competitiveness of the MSME sector.
  • Development of grassroots economy at the district level.


4. Interest Subvention Scheme for Incremental Credit to MSMEs 

The Ministry of MSME launched the Interest Subvention Scheme for Incremental Credit to MSMEs on 2nd November 2018 for commercial banks. The Ministry of Micro, Small, and Medium Enterprises decided to apply this scheme over the financial years 2018-19 and 2019-20. However, due to the pandemic of COVID-19, the government extended this scheme for another financial year 2020-21. 


Purpose of this scheme 

  • To expand productivity in manufacturing and service enterprises.
  • To provide incentives to MSMEs for boarded GST to boost growth in an economy, therefore, diminishing the cost of credit to the Micro, Small, and Medium Enterprises.



  1. All Micro, Small, and Medium Enterprises who are eligible under this scheme: -
  • MSMEs having Udyog Aadhar Number (UAN).
  • MSMEs should have a valid GSTN; In case MSMEs who are not eligible to get GST, they don’t need to have a GSTN. Therefore, they can apply by providing their Permanent Account Number (PAN)

2. Trading activities are covered in this scheme without UAN.

3. MSMEs exporter can obtain interest subvention for pre or post shipment credit under the department of commerce but will not be eligible for assistance under this scheme. 

4. MSMEs that are having interest subvention under central, or state government schemes are not eligible under this scheme. 


Nature of Assistance  

The interest will be calculated at 2% per annum on the outstanding balance from the date of disbursal or the date of notification of this scheme. 


How to apply? 

MSMEs can directly apply to eligible lending institutions under this scheme. 


5. Credit Guarantee Scheme for Micro and Small Enterprises 

Credit Guarantee Scheme for Micro and Small Enterprises was launched in 2000 by the Government of India to get collateral-free credit to the Micro, Small, and Medium Enterprises sector.  

Both enterprises, i.e., the existing and new enterprises, are eligible under this scheme.  

The Ministry of MSME, Small Industries and Development Bank of India (SIDBI), and the Government of India authorized a trust named Credit Guarantee Fund Trust for Micro and Small Enterprises to implement the CGS (Credit Guarantee Scheme).  



Both sectors of MSMEs are eligible for this scheme. 

Coverage of Guarantee ranges from 
85% Micro enterprises up to Rs. 5 lakhs 
75% Others 
50% For retail activity 


Nature of Assistance  

The credit facilities that are eligible to cover term loans and working capital for collateral-free loans up to Rs. 200 lakhs for individual MSME. 


How to Apply: 

MSMEs that are eligible under this scheme can approach banks, Regional Rural Banks, Financial institutions, or NBFCs.  


Discussion for increasing the reach  

The Government of India has set a target of raising credit guarantees to Rs. 50,000 crores under credit guarantee scheme for SME, which is more than 67% over the last year.  


6. CHAMPIONS Portal 

Prime Minister Narendra Modi has launched CHAMPION Portal on 1st June 2020 for MSMEs. Here, CHAMPION stands for Creation and Harmonious Application of Modern Processes for Increasing the Output and National Strength.  


Features of the portal  

  • Access information: - Information related to schemes for MSMEs and government policies, including COVIS 19 special packages and relief measures.


  • Register Grievance / Seek information / Suggestions: - It is integrated in real time with the Government of India grievances portal CPGRAMS and the Ministry of MSMEs own web-based mechanism.


  • You can track the status of complaints.


  • Seek / Give ideas: - You have to log in to access this service.


  • You can locate Champions Control Rooms all over the country.


Service offered under this scheme  

  • Register Grievance
  • Make suggestions & seek guidance R
  • Provide your ideas
  • View Grievance Status
  • Location of Champions control room
  • Resource for Champions
  • Feedback options
  • Covid 19 Manufacturing
  • Register MSME units
  • Start-up corner


Who can apply? 

Listed below are the entities that are eligible under CHAMPIONS Portal: -  

  • Association
  • MSME unit
  • MSME Employee
  • Government officials
  • Entrepreneur
  • Individual



  • To help the Indian MSME grow into big organizations as National and Global CHAMPIONS by determining their grievances and helping, encouraging, supporting and, handholding them.


Objectives of CHAMPION Portal 

  • To help Micro, Small, and Medium Enterprises in this severe situation in terms of raw materials, permissions, finance, labor, etc.


  • To assist the MSMEs capture opportunities in the service and manufacturing sectors.


  • Analyzing the sparks of the bright Micro, Small, and Medium Enterprises that have sufficient potential to become national and international champions.

Therefore, knowing about the best deals for the ZED Scheme. Apply with financeseva

Also read: - What is MSME? Its Definition, Role and Importance

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