ZED SCHEME FOR MSMES : Civil Services Mentor Magazine: SEPTEMBER - 2017


Manufacturing in India accounts for around 16 percent of GDP, which is persistent since 1990's and is relatively low when compared to the 20-percent plus share in countries like Brazil, China, Indonesia, Korea and Malaysia. The manufacturing sector is critical for the economy's growth as it employs 12.0 per cent of the country's labour force as well as provides a transitional opportunity to the labour force in agriculture. In addition, the sector has a multiplier effect for job creation in the services sector. According to National Manufacturing Policy (NMP) 2011, every job created in the manufacturing sector creates twothree additional jobs in related activities. The NMP provides for promotion of clusters and aggregation, especially through the creation of national investment and manufacturing zones (NIMZ). Till 2013-14, 16 NIMZs had been announced. Of these, eight are along the Delhi-Mumbai Industrial ZED SCHEME FOR MSMES Corridor (DMIC). Eight other NIMZs have been given in-principle approval: (i) Nagpur in Maharashtra, (ii) Chittoor in Andhra Pradesh, (iii)
Medak in Andhra Pradesh (now Telengana), (iv) Prakasam in Andhra Pradesh, (v) Tumkur in Karnataka, (vi) Kolar in Karnataka, (vii) Bidar in Karnataka, and (viii) Gulbarga in Karnataka.

If India's growth has to accelerate towards its correct potential, manufacturing sector growth is a must. Country faces lot of structural constraints for manufacturing sector to grow properly. Constraints related to roads, ports, other infrastructure reduce the productivity. If basic infrastructure can be improved India's manufacturing sector will become more competitive, which will help India to go on a higher growth path and enabling large scale job creation. According to the Update, a twice yearly report on the Indian economy and its prospects, India's economic growth is expected to rise to 5.6 percent in FY15, followed by further acceleration to 6.4 percent and 7.0 percent in FY 2016 and FY 2017. The projections could, however, face risks from external shocks, including financial market disruptions arising out of changes in monetary policy in high income countries, slower global growth, higher oil prices, and adverse investor sentiment arising out of geo-political tensions in the Middle East and Eastern Europe. Domestically, the risks include challenges to energy supply and fiscal pressures from weak revenue collection in the short term, the Update said. However, risks could be mitigated to a large extent by focusing on reforms that help the manufacturing sector.

The Government has launched a new scheme namely "Financial Support to MSMEs in ZED Certification Scheme".

The objective of the scheme for promotion of Zero Defect and Zero Effect (ZED) manufacturing Sagar Vani - An Integrated Information Dissemination System amongst micro, small and medium enterprises (MSMEs) and ZED Assessment for their certification so as to:

  • 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.

There are 50 parameters for ZED rating and additional 25 parameters for ZED Defence rating under ZED Maturity Assessment Model. The MSMEs are provided financial assistance for the activities to be carried out for ZED certification i.e., Assessment / Rating, Additional rating for Defence angle, Gap Analysis, Handholding, Consultancy for improving the rating of MSMEs by Consultants and Re-Assessment / Re-Rating.

Under the scheme 22,222 MSMEs will be rated & certified under ZED Maturity Assessment Model, 5,000 MSMEs will be rated & certified under the ZED Defence Model, 7368 MSMEs will be supported for Gap Analysis, Handholding, Consultancy for improving their rating, etc. The total cost of the project is Rs. 491.00 crores (Government contribution Rs 365.00 crores, beneficiary MSMEs contribution Rs 126.00 crores).

Quality Council of India (QCI) has been appointed as the National Monitoring & Implementing Unit (NMIU) for implementation of ZED. QCI has reported that 3217 MSMEs has been registered as on25.07.2017 for ZED Certification. The MSMEwise details are Micro: 1332, Small: 1522 & Medium: 363 and financial assistance to MSMEs is yet to commence.

The Ministry of MSME is implementing a number of schemes to promote MSMEs namely (i) Credit Guarantee Fund Scheme for Micro and Small Enterprises to facilitate collateral free credit to new and existing micro and small enterprises (MSEs); (ii) Scheme for Raw Material Assistance implemented by National Small Industries Corporation Limited under the Ministry; (iii) National Manufacturing Competitiveness Programme (NMCP) and Credit Linked Capital Subsidy Scheme implemented to facilitate upgradation of technology, improve processes and design; (iv) Management Development Training Programmes (MDPs) for enhancing managerial
skills; (v) Micro and Small Enterprises-Cluster Development Programme to facilitate infrastructure upgradation and setting up of Common Facility Centres; and (vi) Marketing Development Assistance Support to MSME; (vii) Ministry of MSME has introduced online MSME Data Bank on 29.07.2016 for creating comprehensive database of MSMEs. Sagar Vani - An Integrated Information Dissemination System

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