No More Zeroes: Govt plans to extend ZED certification scheme to services sector MSMEs

New Delhi: The government has prepared a framework to expand its Zero Defect Zero Effect (ZED) certification scheme to the services sector, extending its quality improvement and competitiveness initiative beyond manufacturing to micro, small and medium enterprises (MSMEs).

The MSME ministry has identified around 20 parameters to assess service enterprises against quality benchmarks. These include timely service delivery, service quality management, facility management, process control, customer management and management of partners, vendors, franchisees and outsourced operations.

The expansion will initially cover sectors such as transport, accommodation, food and beverage services, travel agencies, tour operators and hospitals, according to people aware of the development.


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Services sector MSMEs account for 38% of the country's total MSME base, while manufacturing and trading enterprises account for 20% and 42%, respectively.

The ministry has also developed four to five additional parameters for MSME exporters, including export documentation, product traceability and origin verification, to help them meet international quality requirements, said an official.

"The government's objective is to make MSMEs more competitive and prepare them for integration into global value chains," said one official.

The scheme's reach extends beyond certification, with 22 states/UTs having included ZED into their industrial policies and offering additional incentives to ZED-certified MSMEs.

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Launched in April 2022, the ZED scheme aims to improve MSME competitiveness by encouraging them to adopt quality standards, reduce wastage, improve productivity and minimise their environmental impact. It is part of the MSME Champions Scheme implemented by the ministry.

The ZED portal said around 10.9 lakh manufacturing MSMEs have registered under the scheme. Of these, 7.7 lakh have received bronze certification, while around 11,000 and 6,000 have received silver and gold certifications, respectively.