Daily Mains Question - GS 3 - 8th August 2025
- TPP
- Aug 8
- 3 min read
Welcome to your daily UPSC Mains Answer Practice! Today’s question explores the significance of adopting sustainable practices by Micro, Small, and Medium Enterprises (MSMEs)—a critical sector at the intersection of economic growth, environmental responsibility, and inclusive development. With MSMEs contributing nearly 30% to India’s GDP, 49% to exports, and employing over 110 million people, their role in achieving the Sustainable Development Goals (SDGs) is indispensable. However, despite their economic importance, MSMEs continue to face systemic challenges like limited access to finance, outdated technology, and low resilience to environmental shocks. As climate change, ESG mandates, and global supply chain standards reshape industrial priorities, sustainability is no longer optional—it is a strategic imperative. This question is highly relevant for GS Paper 3 – Indian Economy and Environment, especially in the context of sustainable development, inclusive growth, and strengthening the economic resilience of India’s industrial backbone.
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QUESTION
Discuss the significance of adopting sustainable practices by Micro, Small, and Medium Enterprises (MSMEs) in India. How can such measures contribute to inclusive growth, environmental sustainability, and economic resilience? Answer: Micro, Small, and Medium Enterprises (MSMEs) form the backbone of India’s economy, contributing around 30% to GDP, 49% to exports, and employing over 110 million people. Comprising 96% of industrial units, they are central to India’s manufacturing and trade landscape. However, challenges like low productivity, limited access to finance and technology, and regulatory burdens hinder their long-term sustainability.
In light of global climate goals and the United Nations’ designation of June 27 as MSME Day, integrating sustainable practices in MSMEs is vital for India’s inclusive and green growth.
Why Sustainable Practices Matter for MSMEs:
Cost Savings and Efficiency:
Energy-efficient technologies lower operational costs.
Waste reduction and resource optimization enhance productivity.
Market Competitiveness:
Sustainable MSMEs align with ESG norms, increasing access to global markets and green finance.
Improves brand reputation and consumer trust.
Regulatory and Climate Resilience:
Prepares businesses for stricter environmental regulations.
Reduces vulnerability to climate-related disruptions.
Policy Framework and Tools:
ESG Framework and National Guidelines for Responsible Business Conduct (NGRBC) provide a roadmap for:
Reducing energy use, emissions, and waste.
Ensuring decent working conditions, gender safety, and timely wages.
Supportive Programs:
SIDBI’s Greening MSME Scheme: Financial aid up to ₹20 crore for clean technologies.
CII’s GreenCo Rating System: Helps MSMEs benchmark and improve environmental performance.
Role of Stakeholders:
Government & Industry Associations: Offer tax incentives, subsidies, and training programs.
Larger Corporates: Can extend technical assistance and integrate MSMEs into sustainable supply chains.
Civil Society: Raise awareness and build grassroots capacity for sustainability.
MSMEs represent 90% of businesses globally, generating 60–70% of employment and contributing 50% to GDP. In India, adopting sustainable practices can unlock new growth opportunities, enhance competitiveness, and support national commitments to SDGs and climate action. A coordinated ecosystem of policy support, financial incentives, and capacity-building is essential to mainstream sustainability in the MSME sector.
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