The correct answer is Option 2: Redistribution function
-
Option 1: Allocation function: This function involves the government allocating resources to produce goods and services that the market may not provide efficiently (e.g., public goods). While the Ujjwala Yojana involves resource allocation, its primary aim is not to directly produce a public good.
-
Option 2: Redistribution function: This function aims to reduce income inequality by transferring income or resources from wealthier individuals or groups to less wealthy ones. Providing free LPG connections to women in rural areas directly targets a disadvantaged group, improving their living conditions and potentially their economic opportunities.This is a clear example of redistribution.
-
Option 3: Stabilisation function: This function focuses on maintaining macroeconomic stability, such as controlling inflation or unemployment. The Ujjwala Yojana, while having some indirect economic effects, is not primarily designed to achieve macroeconomic stabilization.
|