October 20, 2019

What are the economic roles of a government?

Regulatory role

  1. Covers a broad spectrum – entry to the business to the final result of business
  2. The reservation of industries to small scale, public and cooperative sectors. 
  3. Licensing system
  4. Regulation of entry
  5. Regulation of product mix, promotional activities etc. 
  6. Regulate relationship between organizations. 

Promotional role

  1. Building infrastructure – power, transport etc. 
  2. Financial support
  3. Institutions for training and other promotional activities. 
  4. Provisions of monetary, fiscal and other incentives. 
  5. Development of priority sectors and activities. 

Entrepreneurial role

  1. Establishing and operating business enterprises and bearing risk.
  2. Factors such as socio-political ideologies, dearth of private entrepreneurship, absence of adequate competition in certain sectors etc contributed for growth of state owned enterprises. 

Planning role

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