Departmental undertakings are financed through budgetary allocation. The correct answer is option 'A'.

Budgetary Allocation:
- Budgetary allocation refers to the process of allocating funds from the government's budget to various departments and undertakings.
- It is the most common and primary source of financing for departmental undertakings.
- The government allocates a certain portion of its budget for each department based on their requirements and priorities.
- The allocated funds are used for various purposes such as salaries and wages of employees, operational expenses, capital investments, and development projects.
- The budgetary allocation is determined through a comprehensive process that involves assessing the financial needs of each department and considering the overall economic and fiscal situation of the government.
- The allocation is made after careful consideration of the government's priorities, policies, and objectives.

Advantages of Budgetary Allocation:
1. Stable and Predictable Funding: Departmental undertakings rely on budgetary allocation as it provides a stable and predictable source of funding. This allows them to plan their activities and projects effectively.
2. Government Support: Budgetary allocation demonstrates the government's support and commitment to the development and functioning of various departments and undertakings.
3. Accountability and Transparency: The allocation process involves a thorough review and scrutiny of the financial needs and performance of each department. This ensures accountability and transparency in the use of public funds.
4. Flexibility: Budgetary allocation allows for flexibility in the use of funds. Departments have the freedom to allocate the funds according to their priorities and requirements.

Conclusion:
In conclusion, departmental undertakings are primarily financed through budgetary allocation. This method ensures stable funding, government support, accountability, and flexibility for the functioning and development of various departments.