Zero Defect, Zero Effect Scheme


Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades. 

 MSMEs play crucial role in providing large employment opportunities at comparatively lower capital cost than large industries 

 It also helps in industrialization of rural & backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income and wealth. 

 MSMEs are complementary to large industries as ancillary units and this sector contributes enormously to the socio-economic development of the country. 

 MSMEs consist of 36 million units, as of today, provides employment to over 80 million persons. 

The Sector through more than 6,000 products contributes about 8% to GDP besides 45% to the total manufacturing output and 40% to the exports from the country. 

 The MSME sector has the potential to spread industrial growth across the country and can be a major partner in the process of inclusive growth

Legacy of MSME Sector - Khadi and Village Industries (KVI), Coir Industry as agro-based traditional industry

About ZED Scheme (Zero Defect, Zero Effect)

 On India's 68th Independence Day, PM Modi urged the industry, especially the MSMEs of India, to manufacture goods in the country with "zero defects" and to ensure that the goods have "zero effect" on the environment.


To enable the advancement of Indian industry to a position of eminence in the global marketplace and leverage India’s emergence as the world’s supplier through the ‘Made in India’ mark.


To develop and implement a ‘ZED’ culture in India based on the principles of:

1. Zero Defect (focus on customer)

• Zero non-conformance/non-compliance

• Zero waste

2. Zero Effect (focus on society)

• Zero air pollution/liquid discharge (ZLD)/solid waste

• Zero wastage of natural resources

Implementation Structure:


 Benefits of ZED

• Credible recognition of the industry for international customers seeking investment in India

• Streamlined operations and lower costs

• Superior quality, reduced rejection and higher revenues

• Increased environmental & social benefits

• Additional employment generation

• Other benefits as announced by the Government from time to time\

 Make in India and ZED

The announcement of Make in India and Zero Defect Zero Effect put in perspective the governments’ intent to change the course of economy by focusing on manufacturing as an engine to sustained growth. In order to build the ecosystem to implement the idea, three important components emerged as the vehicle for this new transformation:

1. The Ease of Doing Business in India.

2. The confidence in quality of source material, components and services. 

3. Making available competent human resource to drive the change.

 While the Department of Industrial Policy and Promotion took the responsibility of creating an atmosphere of Ease of doing business, Quality Council of India(QCI) along with the M/o MSME started exploring the idea of creating a holistic scheme to engage the MSME sector, long considered as a propellant for sustained growth, by improving their quality and competitiveness.

 The ecosystem around ZED model is calibrated to make aware, assess, rate, counsel, handhold, re-assess & certify MSMEs and ensure that they rise up the ZED ladder, thus enhancing their competitiveness in the global marketplace and making them an important cog in the wheel in the “MAKE-IN-INDIA” campaign. It also, as a consequence, provides career opportunities for the youth in India.