IDEAS home Printed from https://ideas.repec.org/a/sae/busper/v5y2017i1p36-68.html
   My bibliography  Save this article

Study About Awareness and Availing of Various Direct and Indirect Fiscal Incentives and its Impact on Financial and Strategic Decisions of MSMEs

Author

Listed:
  • Falguni H. Pandya

Abstract

In India as well as abroad, micro, small, and medium enterprises (MSMEs) are very well known for their contribution to generate employment, export, inclusive growth, and innovation with very low or medium level of investment. However, their contribution to the economy depends upon their competitiveness and sustainability; and in this respect, MSMEs have distinct disadvantage as compared to the large industries. What is required is to awaken the firms for functional competencies for growth and for that financial institutions and the government should find ways and means to spread awareness and sustain its growth for the interest of the nation. Furthermore, in order to undo the setbacks suffered during the British colonial period by craftsman and rural artisans who constituted the backbone of India’s traditional and self-sufficient economy; the policymakers’ task was to make them once again stand on their own feet. In this regard, the government has designed fiscal policy and fiscal instruments as a tool to achieve specific macroeconomic and sector-wise objectives. However, fiscal incentives act as an instrument to enhance the growth of industry and in turn that of economy is a debatable issue all over the world. The present article attempts to examine different types of fiscal incentives given to the MSME units through the survey cum interview method; for that 216 units of GIDC were visited and interviewed. The result revealed that the government must improve awareness of incentives and reduce the procedural complexities to avail it. Furthermore, it was found that direct fiscal incentives such as investment subsidy for establishment of new units and interest rate subsidy and not indirect incentives such as energy review subsidy, cash subsidy for assessment of water consumption and so on are preferred by MSMEs.

Suggested Citation

  • Falguni H. Pandya, 2017. "Study About Awareness and Availing of Various Direct and Indirect Fiscal Incentives and its Impact on Financial and Strategic Decisions of MSMEs," Business Perspectives and Research, , vol. 5(1), pages 36-68, January.
    • Handle: RePEc:sae:busper:v:5:y:2017:i:1:p:36-68
    DOI: 10.1177/2278533716671628
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/2278533716671628
    Download Restriction: no
    File URL: https://libkey.io/10.1177/2278533716671628?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Benjamin Russo, 2004. "A cost-benefit analysis of R&D tax incentives," Canadian Journal of Economics, Canadian Economics Association, vol. 37(2), pages 313-335, May.
    2. Cielik, Andrzej & Ryan, Michael, 2005. "Location Determinants of Japanese Multinationals in Poland: Do Special Economic Zones Really Matter for Investment Decisions?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 20, pages 475-496.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tuomas Takalo, 2012. "Rationales and Instruments for Public Innovation Policies," Journal of Reviews on Global Economics, Lifescience Global, vol. 1, pages 157-167.
    2. Yawei Qi & Wenxiang Peng & Neal N. Xiong, 2020. "The Effects of Fiscal and Tax Incentives on Regional Innovation Capability: Text Extraction Based on Python," Mathematics, MDPI, vol. 8(7), pages 1-19, July.
    3. James Alm & Mir Ahmad Khan, 2015. "Assessing and Reforming Enterprise Taxation in Pakistan," Working Papers 1513, Tulane University, Department of Economics.
    4. Andrzej CieŚlik, 2013. "Determinants of the Location of Foreign Firms in P olish Regions: Does Firm Size Matter?," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 104(2), pages 175-193, April.
    5. Lolita Paff & Todd A. Watkins, 2009. "What is the After-Tax Price of R&D? An Interstate Comparison," Fiscal Studies, Institute for Fiscal Studies, vol. 30(1), pages 73-101, March.
    6. Daniel Gama e Colombo, 2016. "Impact Assessment of Tax Incentives to Foster Industrial Innovation in Brazil: The Case of Law 11,196/05," Working Papers, Department of Economics 2016_30, University of São Paulo (FEA-USP).
    7. Mohnen, Pierre & Lokshin, Boris, 2009. "What does it take for an R&D tax incentive policy to be effective?," MERIT Working Papers 2009-014, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    8. Mariasole Bannò & Marika Vezzoli & Maurizio Carpita, 2011. "Disentangling the Innovation - Internalization Process Through a Structural Equation Model," ERSA conference papers ersa11p195, European Regional Science Association.
    9. Chidlow, Agnieszka & Salciuviene, Laura & Young, Stephen, 2009. "Regional determinants of inward FDI distribution in Poland," International Business Review, Elsevier, vol. 18(2), pages 119-133, April.
    10. Arkadiusz Świadek, 2015. "Aktywność innowacyjna przedsiębiorstw zagranicznych i krajowych," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 2, pages 145-162.
    11. Nielsen, Bo Bernhard & Asmussen, Christian Geisler & Weatherall, Cecilie Dohlmann, 2017. "The location choice of foreign direct investments: Empirical evidence and methodological challenges," Journal of World Business, Elsevier, vol. 52(1), pages 62-82.
    12. Heinz Handler & Andreas Knabe & Bertrand Koebel & Margit Schratzenstaller-Altzinger & Sven Wehke, 2005. "The Impact of Public Budgets on Overall Productivity Growth," WIFO Working Papers 255, WIFO.
    13. d’Andria, D. & Savin, I., 2018. "A Win-Win-Win? Motivating innovation in a knowledge economy with tax incentives," Technological Forecasting and Social Change, Elsevier, vol. 127(C), pages 38-56.
    14. Norifumi Kawai, 2011. "The Role of Institutional Conditions in Japanese FDI in European Transition Economies," Chapters, in: Werner Pascha & Cornelia Storz & Markus Taube (ed.), Institutional Variety in East Asia, chapter 11, Edward Elgar Publishing.
    15. Heinz Handler, 2006. "Staatsausgaben und Wirtschaftswachstum in Europa. Der Beitrag der öffentlichen Ausgaben zur Lissabon-Strategie," WIFO Studies, WIFO, number 26583.
    16. Diego d'Andria & Ivan Savin, 2015. "Motivating innovation in a knowledge economy with tax incentives," Jena Economics Research Papers 2015-004, Friedrich-Schiller-University Jena.
    17. Bye, Brita & Fæhn, Taran & Heggedal, Tom-Reiel, 2009. "Welfare and growth impacts of innovation policies in a small, open economy; an applied general equilibrium analysis," Economic Modelling, Elsevier, vol. 26(5), pages 1075-1088, September.
    18. Agnieszka Chidlow & Stephen Young, 2008. "Regional Determinants of FDI Distribution in Poland," William Davidson Institute Working Papers Series wp943, William Davidson Institute at the University of Michigan.
    19. James Alm & Mir Ahmad Khan, 2008. "Assessing Enterprise Taxation and the Investment Climate in Pakistan," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0810, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    20. Boris Lokshin & Pierre Mohnen, 2012. "How effective are level-based R&D tax credits? Evidence from the Netherlands," Applied Economics, Taylor & Francis Journals, vol. 44(12), pages 1527-1538, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:busper:v:5:y:2017:i:1:p:36-68. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.