Impact of Fiscal Incentives on MSMEs Performance in Gujarat

Abstract

Fiscal incentives act as an instrument to enhance growth of industry and in turn, that of economy is a debatable issue all over the world. Many countries and many governments have burnt their hands in imposing or reducing tax rates and other benefits. The impact of different fiscal incentives on various corporate decisions is not certain and varies from country to country and time to time. Sometimes it has been found that such fiscal incentives work best when it is coupled with other factors like political stability, infrastructure facilities etc. In addition, many researchers have viewed that such fiscal incentives results in to nothing but just raises the burden of the government. The present study attempts to find out how industrial sector particularly MSMEs view these incentives on their overall impact.

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

“…In that regard, the survey cum interview method adopted by Pandya and Joshi (2015) revealed that respondents really value concrete direct incentives along with other basic benefits and not a range of miscellaneous incentives. This also confirms with the findings of Jani et al (2015), Yusuph and O Youze (2014), and IFC Team (2008) while research by Ramarao (2012) and Pal (2013) emphasized more on other basic benefits given to MSMEs.…”

“…Regarding requirement and importance of different incentives; 118 respondents clearly indicated their choice for direct incentives while 61 and 27 respondents preferred both direct and indirect incentives, respectively. Thus, preference for the incentives suggested by MSMEs confirms with the findings of Anke (2003), Jani et al (2015), and Pandya and Joshi (2015), while it contradicts with Rondinelli andBurpitt (2000) andIFC Team (2008). Similarly, factor analysis carried out on direct and indirect incentives further indicated that respondents prefer right blend of direct and indirect incentives as Factor 1 was composed of all indirect incentives; while Factors 2, 3, and 4 showed family of various direct and indirect incentive.…”

“…However, the other side is also very true that such MSMEs are small in numbers and so are their performances, while majority of them are sick or near to sickness. From the seminal work done by Rondinelli and Burpitt (2000), IFC Team (2008), FIAS-SEDF (2008), and Jani, Joshi, and Pandya (2015), it is revealed that mere fiscal incentives offered to MSMEs to address their various problems like capital inadequacy, technological inabilities and so on do not help them much from becoming sick. Furthermore, it was also found that apart from incentives, they require other benefits that can solve their problems.…”

“…Authors strongly recommended for a mixture of both direct and other fiscal and monetary incentives such as tax incentives, export incentives and promotion, streamlining of bureaucratic procedures, support for education and training, technology support, market development program and so on. Respondents revealed in the research carried out by Jani et al (2015) that fiscal incentives is a good booster to start the business and it also reduces the cost of the capital. They also opined that the government should provide right blend of direct incentives such as cash subsidy, interest rate subsidy, and backward area subsidy along with other benefits such as infrastructure development, enhancing skills of semiskilled and unskilled workers, availability of land, power and so on.…”

Pengaruh Fasilitas Kepabeanan Terhadap Nilai Ekspor Dan Kinerja Keuangan Perusahaan

“…Mengingat hal tersebut di atas dan dikarenakan belum ada penelitian terdahulu yang melakukan pengujian secara komprehensif atas fasilitas kepabeanan berupa KB dan KITE dalam satu model regresi, maka Penulis akan membuat sebuah penelitian yang komprehensif, yang akan menguji pengaruh atas fasilitas kepabeanan berupa Fasilitas KB dan Fasilitas KITE terhadap nilai ekspor dan kinerja keuangan perusahaan. Penelitian ini akan mengisi celah kekurangan peneliti sebelumnya dari Mousley et al (2010), Adiyanti (2012), Pribadi (2012), Fowowe (2013), Suroyah (2014), Jani et al (2015), Gumilar et al (2015), Chen et al (2016), Tembur (2016), Esfandiary (2017), Nurcahyo & Purwana (2021), Nabila & Sriyanto (2018), Sari & Baskara (2018), dan Hapsari & Arif (2018), serta Wicaksono & Mangunsong (2021). Celah yang dimaksud di sini adalah berupa perbedaan hasil penelitian (gap research) yang telah dilakukan oleh peneliti terdahulu, yakni terdapat hasil penelitian yang menyatakan bahwa insentif fiskal atau fasilitas kepabeanan memberikan pengaruh signifikan positif terhadap nilai ekspor atau kinerja keuangan dan terdapat penelitian yang menyatakan sebaliknya.…”