ZERO DEFECT ZERO EFFECT (Syllabus: GS Paper 3 – Economy)

Context: Recently, the Prime Minister of India inaugurated the TVS Open mobility platform and the Centre of Excellence on Employment and Livelihood in Madurai, emphasizing the importance of the manufacturing sector adopting a policy of 'Zero defect and zero effect.'

Zero Defect Zero Effect (ZED)

• About: The ZED scheme offers environmentally conscious manufacturing certification with gold, silver, and bronze levels based on 20 performance parameters.
• Launched in: October 2016 
• Revamped in: April 2022 
• Nodal Ministry: Ministry of MSME
• Aim: To enhance MSME competitiveness, make them sustainable and transform them as National and International Champions.
• Objectives of the ZED Scheme

oCreate awareness about ZED manufacturing.

oMotivate MSMEs for ZED rating assessment.

oDrive manufacturing with Zero-Defect processes.

oEmphasize environmental impact minimization (Zero Effect).

oEncourage MSMEs to upgrade quality standards in products and processes.

oContribute to the "Make in India" campaign.

• Applicability: Currently applicable exclusively for manufacturing MSMEs.
• MSME Sustainable (ZED) Certification: It is an extensive drive to create awareness amongst MSMEs about Zero Defect Zero Effect (ZED) practices and motivate & incentivise
• Certification Levels:

oLevel 1: BRONZE

oLevel 2: SILVER

oLevel 3: GOLD

Micro, Small & Medium Enterprises (MSMEs)

• About: MSMEs fall under the regulatory purview of the Micro, Small & Medium Enterprises Development (MSMED) Act of 2006.
• Classification of MSMEs:
• Micro: Investment in Plant and Machinery or Equipment: Not more than Rs.1 crore and Annual Turnover ; not more than Rs. 5 crore.
• Small: Investment in Plant and Machinery or Equipment: Not more than Rs.10 crore and Annual Turnover ; not more than Rs. 50 crore.
• Medium: Investment in Plant and Machinery or Equipment: Not more than Rs.50 crore and Annual Turnover ; not more than Rs. 250 crore.