When goods are financed through the budget and can be used without any direct payment, they are known as.....
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Public provision.
Goods that are financed through the budget and can be used without any direct payment come under public provision. This term is about who pays for the goods, whoever may produce them.
Option (1) Public goods. — Incorrect. Public goods are goods whose benefits are available to all, and one person’s use does not reduce another’s. This describes the good itself, and it may be produced by the government or the private sector.
Option (2) Public provision. — Correct. The budget pays, and people use the goods without paying directly.
Option (3) Public production. — Incorrect. This means that the goods are produced directly by the government. It is about who makes the goods.
Option (4) Private goods. — Incorrect. The benefits of a private good go to the person who buys it, and others can be kept out. Such goods are bought in the market.
Note: A same/similar question was asked in CUET (UG) in the papers below.
| 2026 | 2025 | 2024 | 2023 | 2022 |
| – | 29-05 S2 31-05 S1 | – | – | – |
NCERT (2026-27): “Allocation Function of Government Budget … The link between the producer and consumer which occurs through the payment process is broken and the government must step in to provide for such goods. There is, however, a difference between public provision and public production. Public provision means that they are financed through the budget and can be used without any direct payment. Public goods may be produced by the government or the private sector. When goods are produced directly by the government it is called public production.” |