The government in its budget has announced the construction of seven textile parks under the scheme of mega-investment textile parks. Which objective of the government budget is most likely being reflected here? (Choose the correct alternative).
Answer & explanation
Correct answer: option 1
In the above question, the construction of seven textile parks under the scheme of mega-investment textile parks is being done with government revenue. The allocative function in budgeting determines on what government revenue will be spent. Government usually spends the amount on the production of public goods, which are non-rival and non-excludable in nature.