Zero Defect and Zero Effect Scheme

Every MSME wishes to export their goods to the foreign markets. However, the biggest obstacle they face is manufacturing quality products which match international standards. To tackle this challenge, the MSMEs need to enhance the quality of their products and production pace. This is where the Zero Defect and Zero Effect Scheme comes into the picture. 


The Zero Defect and Zero Effect Scheme encourages MSMEs to initiate the ZED manufacturing process and helps them to improve the quality of production. This results in ease of penetration into foreign markets. It also enables them to reduce wastage, thus improving their production capacity. This also allows the MSMEs to avail more Intellectual Property Rights and develop innovative products.

Below mentioned is the list of awareness and training activities conducted under the scheme: 

  1. Industry Awareness Programmes:
  • The Industry Awareness Programmes are organised by the Quality Council of India, MSME Development Institute and other industry associations. The MSMEs can participate in these programmes free of cost. To find the list of all the programmes conducted, click here.
  • The training will be provided for the purpose of capacity-building for the North-Eastern Region, Jammu and Kashmir, and industrially backward and remote areas. This will focus on building capacity in line with Zero Defect and Zero Effect (ZED) manufacturing.
  • Other than the regular awareness programmes, the MSMEs will also be provided training with respect to Best Practices and International Benchmarking.
  • To participate in this training, MSMEs must have a ZED silver certification. As a part of this, a five-day visit to the sites of other MSMEs will be conducted by five MSMEs possessing silver certification. This is to give them an idea about the world-class practices adopted by other MSMEs in the sector. 
  1. Creation of awareness and participation through electronic medium:
  • MSMEs can get their doubts cleared about quality practices and certification by reading about them online.
  • MSMEs can gain knowledge on e-modules on lean manufacturing and quality by clicking here.
  1. Accreditation, Assessment and Rating or Re-rating:
  • Under this scheme, 22,222 MSMEs will be provided financial assistance to implement ZED assessment and certification. The MSMEs can get themselves assessed in the following three stages:
Assessment Charges
Online (e-Platform) self-assessment NIL
Desk Top assessment ₹10,000/-per MSME
Complete assessment a)      ₹80,000/- for ZED rating per MSME

b)      ₹40,000/- for additional ZED Defence rating

c)       ₹40,000/- for Re-rating


  • In addition to this, an MSME would receive a ZED Certificate issued by Quality Council of India.
  • Post the certificate being issued, an MSME would receive a subsidy on these fees.
  • The subsidy will be a special emphasis on SC/ST entrepreneurs.
  • The subsidy for Small Enterprise would be up to 60% of total expenditure for assessment, for Medium Enterprise would be 50% of total expenditure for assessment, while that for Micro Enterprise would be up to 50% of total expenditure for assessment but is extended up to 80% for scheduled castes and scheduled tribes.

Important Notice:

The Quality Council of India assesses an MSME’s process before rating or accrediting them. The rating depends on the MSME’s processes and after this assessment a Bronze, Silver, Gold, Diamond or a Platinum Rating is given to them. To know more about the guidelines, click here


How does an MSME benefit from this scheme?

An MSME benefits from this scheme in the following ways:

  • Credible recognition of the industry for international customers seeking investment in India
  • Streamlined operations and lower costs
  • Superior quality products, reduced rejection of the products and higher revenues
  • Increased environmental & social benefits
  • Additional employment generation

*MSMEs can be updated about benefits as and when announced by the Government from time to time.

Eligibility Criteria

What is the eligibility criteria for this scheme?

The eligibility criteria for this scheme is as follows:

All Micro, Small and Medium Manufacturing Enterprises throughout the country registered with Ministry of MSME (Udyog Adhar Memorandum), DIC (EM-II) or with any other agency (Industry Association and Government agency) are eligible for this scheme.


An MSME can apply for this scheme after being selected by the implementing agencies.

The Implementing agencies conduct their selection of MSME clusters or common product verticals.

With the help of electronic medium, assessment and certification assistance will be provided to the MSMEs.

After being selected, the MSMEs can fill the application form as per the guidelines mentioned in the following link

Certain percent of fees are payable in advance by the MSMEs to the National Monitoring and Implementation unit.

Mentioned below is the estimated total financial assistance for activities covered under the scheme relevant for MSMEs:

Category Financial assistance provided by Government of India (in lakhs) Contribution from the applicant (in lakhs)
Part 1    
Industry awareness programmes ₹1,470 Nil
Workshops at regional, state, and national level organised by Quality Council of India, Chambers, and variety of Industry Associations ₹60
Training to be provided for the purpose of capacity building for North Eastern Region, Jammu and Kashmir, and Industrially backward and remote areas ₹150
Training with respect to Learning Best Practices and International Benchmarking ₹400
Part 2
Development of electronic platform and provision of online support ₹200
Content writing for the purpose of capacity building ₹300
Part 3
Accreditation, Assessment and Rating or Re-rating ₹14,000 ₹6,000
Assessment of rating by the assigned credit rating and other agencies ₹1,400 ₹600
Improvement in rating to be done by gap analysis, handholding, and consultancy ₹9,800 ₹4,200
Re-rating or assessment to be done by other credit rating agencies ₹4,200 ₹1,800
Certification by Quality Council of India ₹50 Nil
Miscellaneous expenses ₹400

Note: The above-mentioned list is not exhaustive and covers the content only applicable for MSMEs.

Additional subsidy to the extent of 5% will be provided for Scheduled Caste and Scheduled Tribe Women and MSME’s located in the North Eastern Region and Jammu and Kashmir. 

Documents Required 

What are the documents required for this scheme? 

The following documents are required to apply for scheme: 

  • Post submission of application as per Annexure 3 format, an MSME can get the list of documents required from the respective implementing agency.

For further details and guidelines, please click here or here

Scheme for Improving Your Manufacturing Sector through Quality Management Standards and Quality Technology Tools

Every MSE aims to manufacture and deliver high quality products. Many-a-times the manufactured products do not meet the standards set by the MSE. This is where the scheme for enabling a Competitive Manufacturing Sector comes in.


The scheme for enabling Competitive Manufacturing Sector provides MSEs with the necessary tools and technology needed to improve the quality of their products while also reducing production costs.


How does an MSE benefit from this scheme?

An MSE benefits from this scheme in the following ways:

  1. The MSE is introduced to appropriate course modules for technical institutions.
  2. The MSE is made aware of quality measures through campaigns and sessions with experts. The details of these sessions can be found here.
  3. The MSE is given financial support by the government to develop a superior quality product in case of quality issues.

The process is as follows:

  • The DC MSE will come up with a list of so called threatened products from the awareness campaigns it conducts. It will also separately call for submissions.
  • Then a ‘Professional Study’ will be conducted and the characteristics of a competent product will be identified. Once identified, the ‘GoI Contribution’ will be capped at ₹5 lakh. The MSE too will be expected to make a contribution of ₹2.5 lakh.
  • An MSE can also undertake technical exposure visits on cost sharing basis with 75:25 Government/Private contribution (numbers, duration, travel costs, hotel stay and other details are all part of the package). For example, if the GoI Contribution is ₹5 lakh, the Private Contribution would be ₹2.5 lakh
  • An MSE can also avail services from technical bodies* for the development of a superior product. For example, if the GoI Contribution is ₹5 lakh, the Private Contribution would be ₹3 lakh
  • For marketing activities, if the GoI Contribution is ₹5 lakh, then the Private Contribution would be ₹0.5 lakh
  1. Implementation of quality management standards and quality technology tools in selected Micro & Small Enterprises
  • Under this scheme, 100 MSEs would be selected to implement Quality Technology Tools/Quality Management Standards from the awareness programmes conducted. For this, 25% & 50% of the cost will be collected from participating Micro & Small Enterprises respectively.
  1. Monitoring international study missions

Under this scheme,

  • One Micro & Small Enterprises Mission per year is deputed for a training session abroad at specific award winning organizations
  • One Micro & Small Enterprises team per year is deputed to International events for first-hand study of Advanced Quality Management Systems & Tools

Eligibility Criteria

What is the eligibility criteria under this scheme?

The eligibility criteria under this scheme is as follows:

  1. The MSE should hold Entrepreneurs Memorandum (E.M. No.)
  2. The MSE should be engaged in current activities for at least the last 2 years and have a good track record
  3. MSE should have regular audited accounts for the past 2 years
  4. The MSE must have the necessary qualification that a specific activity may require

Terms and Conditions

What are the terms and conditions under this scheme?

The terms and conditions under this scheme are as follows:

  1. All attempts will be taken to ensure that 50% of the enterprises are selected from micro sector and 50% from small sector. However, a spillover from one sector to another may be considered, if sufficient numbers of enterprises are not available in a particular sector and funds permit.
  2. Financial assistance to any one organisation or association would normally be restricted to two events in a financial year.
  3. For the same event, not more than one organisation shall normally be sponsored.
  4. All publicity material, banners and reports relating to the event should indicate the support of the Ministry.
  5. The Ministry may be represented in the delegation if it has an appropriate technical and active relation with the product/sector and it helps ‘anchoring’ of the information/ knowledge.

Documents Required

What are the documents required to apply for this scheme?

All eligible Micro & Small Enterprises should submit their Application in the prescribed Proforma (Annexure-A) along with following documents:

  1. An undertaking to contribute 25% or 50% of the total cost as applicable to the unit, wherever applicable
  2. An undertaking / Affidavit stating that similar benefits have not been obtained from any other Government sponsored schemes

*Technical bodies

  1. Quality Council of India and National Recruitment Board for Personnel and Training
  2. Consultancy Development Corporation
  3. National Productivity Council
  4. Standardization Testing & Quality Certification (STQC, a Society under Ministry of IT)
  5. IIQM (India Institute of Quality Management)
  6. Industry Associations that have taken active interest in QMS/ QTT
  7. Technical Institutions, Engineering Colleges, Tool rooms

 For further information on this scheme, click here.