What do you mean by Promotional role of government?

The promotional role of government encompasses government efforts to provide adequate infrastructure and an environment conducive for business. Hence, this role is indirect in nature. The government provides various incentives and schemes for encouraging business activities, besides basic infrastructure like roads, airports, supply of water and power, bridges, communication and transportation system, banking and financial systems, industrial training centres, marketing network etc. It also coordinates the working of public, private joint and cooperative sector.

In promotional role, government does not intervene or regulates the working business.Some of activities performed under this role are:

  1. Maintenance of public utilities.
  2. Promote private and foreign investment.
  3. Provide trade incentives for promoting foreign trade.
  4. Match and control money supply with development requirements.
  5. To enable effective utilization of various resources.
  6. Encourage developmental attitude among various sectors.
  7. Encourage optimal utilization of various natural resources.
  8. Ensure equitable income distribution.
  9. Make economic resources productive and efficient.

In nutshell, promotional role of the government encompasses fiscal, budgetary and monetary incentives for expansion of business and priority sectors of the economy.

Tags: B.Com

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