What do you understand by Promotional Role of the Government?

The promotional role of government includes its efforts to provide adequate infrastructure and an environment conducive for business, and hence this role is indirect in nature. It includes government incentives and schemes for encouraging business activities, building of basic infrastructure like roads, airports, supply of water and power, bridges, communication and transportation system, banking and financial systems, industrial training centers, 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. Maintaining public utilities.
  2. Promoting private and foreign investment.
  3. Providing trade incentives for promoting foreign trade.
  4. Matching and controlling money supply with development requirements.
  5. Enabling effective utilization of various resources.
  6. Encouraging developmental attitude among various sectors.
  7. Encouraging optimal utilization of various natural resources.
  8. Ensuring equitable income distribution.

Making economic resources productive and efficient. Thus, it can be said that the 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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