Reallocation of resources: Through its budget policy the government of the country directs the allocation of resource in a manner that there will be balance between the goals of profit maximization and social welfare.
Production of socially useful goods like electricity is encouraged through subsidies to encourage investment government can give tax concession. Production of goods which are injurious to health or harmful for the society may be discouraged through heavy taxation just like cigarettes, whisky, liquor etc.
