Authors: Md Mahfooz Iqbal, Dr. Ram Pravesh
Abstract: Micro, Small, and Medium Enterprises (MSMEs) constitute a fundamental pillar of the Indian economy, contributing substantially to employment generation, industrial innovation, and national GDP. Despite their pivotal role, a significant proportion of MSMEs face considerable challenges in adopting sustainable business practices. These challenges stem from financial constraints, limited awareness, technological gaps, and deep-seated behavioral barriers. Conventional policy instruments, such as regulatory mandates and subsidy schemes, have yielded limited success in fostering widespread adoption of sustainability measures. This study investigates the potential of behavioral nudging—an influential concept derived from behavioral economics—as a pragmatic and cost-efficient mechanism to promote sustainability among MSMEs without enforcing restrictive regulations. By leveraging tools such as default options, social norm interventions, information framing, feedback systems, and commitment devices, nudging subtly alters the choice architecture, guiding decision-making while preserving entrepreneurial autonomy. Drawing upon a synthesis of secondary data, international case studies, and sector-specific trends within Indian MSMEs, this research proposes a behaviorally informed framework tailored to the Indian socioeconomic context.
DOI: https://doi.org/10.5281/zenodo.17983513
