The Illusion of Profitability: How Opportunity Cost Neglect Distorts Resource Allocation in Indian MSMEs

Author(s)	Mr. Nilesh Jagdish Ahuja, Dr. Jaywant Ramdas Bhadane
Country	India
Abstract	This paper examines "The Illusion of Profitability" a widespread condition where an Indian small enterprise appears profitable on paper but is actually eroding economic value because decision-makers overlook foregone alternatives. Synthesizing secondary literature and empirical benchmarks from Indian institutions, we explore how cognitive overload, mental shortcuts, and severe capital constraints cause business owners to treat unpriced internal assets such as their own time, personal equity, and self-owned land or premises as free resources.
Keywords	Indian MSMEs, Behavioral Economics, Opportunity Cost, Resource Allocation, Managerial Accounting, RBI/SIDBI
Field	Sociology > Economics
Published In	Volume 7, Issue 5, September-October 2026
Published On	2026-10-11

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