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ZED: CREATING GROWTH DRIVERS FOR MSMES

Globally, the Micro, Small and Medium Enterprises have been recognized as the backbone of every economy. Contribution of MSMEs is manifold and includes employment generation, reduction of regional disparities, fostering equitable economic growth and several other advantages. The role of MSMEs has been recognized by successive governments and this can be witnessed in the evolution of policy frameworks & measures adopted from time to time. The ambitious ‘Make in India’ initiative by the Government of India is a significant push that would make a substantial impact on the indigenization and attract sizable foreign investment. The vision of the Hon’ble Prime Minister to make India a global manufacturing hub can become a reality if our manufacturing sector becomes globally competitive and provides high quality products acceptable globally. The ZED Certification Scheme aims to provide a roadmap to the MSMEs to enhance their global competitiveness. The competitiveness comes not only from the capabilities of organizations but also from the strategic interventions of the Government. There are various challenges that MSMEs face and it is prudent that we create an ecosystem to alleviate the challenges of MSMEs and replace them with growth drivers. ZED is moving strategically to create these growth drivers and would play a critical role in times to come.

Apart from conferring several advantages, ZED is making an attempt to create an ecosystem of a conducive business environment for the MSMEs to grow and thrive. MSMEs in India are heterogeneous in nature with a wide range of products, different sizes & constitution and so are the challenges. Some of the major challenges for MSMEs are: lack of adequate credit and capital, technological obsolescence and lack of knowledge or will to adopt new technologies, inadequate access to markets, lack of skilled human resources, cumbersome regulatory requirements and poor adaptability to emerging international trends. This calls for the need of strategic interventions to bring together various stake-holders including the Government, industry and other agencies/associations to address these challenges.

Addressing this need, ZED has collated the key challenges faced by the MSMEs and worked on the propositions that could help in alleviating them. Taking this forward, the Ministry of MSME, Government of India, has created a Taskforce comprising of various stakeholders from the Ministry, QCI, industry and industry chambers who would be deliberating on these proposed tangible benefits. The 1st meeting of this Taskforce, under the chairmanship of the Joint Secretary & Additional Development Commissioner (MSME), was held in January 2018 and the Task force is expected soon to come out with its recommendations on how ZED can address the challenges faced by the MSMEs.

Another significant development to encourage MSMEs adopt ZED and move towards becoming world class is inclusion of ZED in the Industrial Policy of Government of Punjab in the form of encouraging adoption of modern quality practices & linking incentives to achievement of performance ratings, ZED ratings etc. and providing additional support to ZED Scheme by “reimbursement of 50% of expenses subject to maximum of Rs. 5 lakh incurred on plant and machinery/testing equipment for obtaining at least silver category status under ZED scheme. ZED has connected with 16 State Governments so far and has already signed MOUs with a few including Andhra Pradesh, Punjab, Telangana, Chhattisgarh and Haryana.

ENGAGING DISTRICT INDUSTRIES CENTRES (DICS):

 

District Industries Centres (DICs) have been pivotal in propagating ZED in their respective districts. In the past 3 months, ZED in association with 30 DICs across 7 states have carried out awarenesscum- registration camps. The most notable success of ZED was visible in the states of Jammu & Kashmir and Tripura, where 5 and 8 districts respectively saw awarenesscum- registration programmes seeing more than 400 MSMEs registering with ZED. This was in-line with one of the objectives of the Scheme of reaching out to Northeast, J&K and industrially backward areas. 

LARGE ORGANISATIONS ADOPTING ZED:

 

While State Governments have taken ZED in the administrative stride, Large Enterprises have also shown interest in the adoption of ZED for their supply chain set up. The objective of including ZED as a measure in their procurement process and a standard of evaluation of their vendors has been seen in positive light by leading organisations like Airports Authority of India, Suez, ISRO, Mahindra & Mahindra, Lucas TVS, BASF, 3M, Hindustan Fertilizers Ltd, Hindustan Pesticides Ltd, Hindustan Petroleum Corporation Ltd BEE, ALIMCO, Bosch India, Food Corporation of India, ITI Ltd, Schneider, Air India amongst others. Such initiatives of collaborating with the Ministries, the State Governments, industry, financial institutions, industry chambers/ associations and other stakeholders would pave the way to create a conducive business environment for not only the MSMEs but for the entire industry as well.

Central government has recently given impetus on MSMEs perceiving the sector as the backbone of Indian manufacturing. Initiative like Make in India has also made quality manufacturing a finer aspect to be looked at considering the competitive industrial sector existing today. ZED certification is expected to act as a panacea with its holistic approach of assessment of MSMEs by reducing repetitive inspections. It will certainly be a gamechanger in the field of quality certification as it is the first Indian holistic maturity assessment model, laying down a roadmap for MSMEs to improve on specific aspects. The USP of the ZED model is that it makes quality measurable with a lot of stress given on the measurement and monitoring of the processes. If adopted in true spirit, ZED model will ensure that an MSME sees continual improvement in its processes and will, over a period of time, be competitive in both domestic and international markets. The ZED team is strategically bringing together the important stakeholders to position ZED as an enabler to drive the growth of Indian MSMEs and realize the ‘Make in India’ dream.