Which of the following are the functions of Government Budget?

(A) Restriction.
(B) Allocation.
(C) Redistribution.
(D) Stabilisation.

Choose the correct answer from the options given below:

(B), (C) and (D) only

The correct answer is Option (2) → (B), (C) and (D) only

Restriction is not a function of the government budget in economics.

The main functions of a government budget are:

1. Allocation Function of Government Budget : This refers to the government's role in providing public goods (like national defense, roads, street lighting) and merit goods (like education, healthcare) which the free market either fails to provide or provides inadequately. The budget allocates resources towards these areas. This is a core function.

2. Redistribution Function of Government Budget : This involves the government's efforts to influence the distribution of income and wealth in the economy. This is achieved through various fiscal tools like progressive taxation (higher income earners pay a higher percentage of their income in taxes) and transfer payments (like pensions, unemployment benefits, subsidies) to the poorer sections of society. This is a core function.

3. Stabilisation Function of Government Budget: This refers to the government's use of fiscal policy (government spending and taxation) to stabilize the economy from fluctuations like inflation and deflation, or to manage business cycles (recessions and booms). The goal is to achieve macroeconomic stability (price stability, full employment, and economic growth). This is a core function.