ECONOMIC ROLE OF GOVERNMENT The government plays an important role in almost every national economy of world.

Business fortunes and strategies are influenced by the economic characteristics and economic dimension. The government normally plays four important roles in an economy. They are, 1. Regulatory Role Government regulation of the business may cover a broad spectrum extending form entry into business to the final results of business. The reservation of industries to small scale, public and co-operative sectors, licensing system etc., regulate the entry. Regulations of product mix, promotional activities etc., amount to regulation of conduct to business. The state also regulate relationship between enterprises. 2. Promotional Role The promotional role played by the government is very important is developed as well as in duping countries. In developing countries, where the infrastructural facilities for development are inadequate and entrepreneurial activities are scarce, the promotional role of the govt. assumes significance. The state will have to assume direct responsibility to build up and strengthen infrastructure such as power, transport, finance, marketing, institutions for training and other promotional activities. The promotional role of the state also encompasses the provisions of fiscal, monetary and other incentives and development of priority sectors and activities.