What is the economic role of government, Managerial Economics

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Q. What is the economic role of government? What are the roles?

Meaning: economic role is the role played by the government in uplifting the economy. The important roles:

1. The regulatory role; a large part of the economy is planned and regulated by the government. It may determine the conditions under which persons or associates may enter certain lines of business, public control and the relationships between various segments of the economy. Direct control v/s indirect control.

2. The promotional role: the state will have to assume direct responsibility to build up and strengthen the necessary infrastructure such as power, finance, marketing etc.

3. The entrepreneurial role: the growing importance of the entrepreneurial role of the state is evident from the rapid expansion of the public sector in most of the countries.

4. The planning role: the state plays a very important role as planner. The welfare government has the responsibility for fulfilling the aspirations of the people by bringing about all-round prosperity.


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