There is no denying the fact that the Government has a very important role to play in the economy of any country. The government plays an important role not only in the economy but also in other sectors also. Some sectors are closely related to other sectors and so it is a very big task of the Government to keep a track on all the activities taking place in the different sectors of business. The Government also takes a decision about the future of the companies listed in the stock market, which is one of the main responsibilities of the Government.
The basic function of Government is to ensure the security of the country. Keeping this as their top priority, the Government decides how much of the fiscal resources are required by the economy of a country. After taking this decision, it monitors the overall economic condition of the country and decides about the growth rate of the economy of the nation. It also decides about the foreign investment and decides whether it will be helpful for the economic development of the nation or not. All these activities are carefully watched by the government officials.
In such a way, it is clear that Government has a very important role to play in the economy of any country. The main purpose of Government is to see that all the activities are carried out in the best possible manner and the growth rate of the business sector is also properly monitored. This can be done by regulating the number of licenses the businessmen get for doing a particular business. All the licenses have certain rules attached to them and if any businessman does not follow these rules, he will not be granted a license and that would badly affect his business.
All the businessmen have to abide by the norms of the law in the same manner as they are required to obey the rules of the government sector. There are many small business sectors where the government regulation is less. However, the number of industries in this sector is definitely less than other sectors. Hence, it is clear that the government plays a very important role in the overall economic activity of the country. Every single business activity must be well monitored by the government officials in order to ensure that the growth rate of the business sector is increased.
The second question that comes to our mind is how much importance of government regulation is there in the market. First of all, you can be absolutely sure that the government regulation plays an important role in the market because it decides about how much the profit margin of a particular industry gets. Suppose there is wholesale business sector and the profit margin is low due to low volume of business. Suppose also that the government decided that the amount of taxes to be paid on the wholesalers will be increased. This will obviously bring about a hike in the cost of wholesale commodities. Hence, in such a situation, the government regulation ultimately helps in bringing about a balanced economic system.
The third question that we would like to raise is how much importance of government regulation is there in the developed countries? The answer to this question is that the developed countries have an adequate amount of government regulation for the business sector. Hence, the business people of these countries are not facing many problems as compared to those who do not have any sort of government regulation in the business.