1. Based on a peer-review process

The needs of each country and each region are different according to the epidemiology. The economic situations are diverse.
Always as a first measure, the investment should be adjusted to the best potential health result based on proven scientific parameters

Based on the quality of the proposal. Any proposal of good quality should be funded.

Government should engage with effective way to grant scientific based on many things particularly, the track record of the research team

1.  Based on the potential impact on society 
2.  Based on the track record of the research team 
3.  Based on a peer-review process 
4.  Based on the likelihood of commercialization 

None of the proposed answers. It should be allocated in a recurring and egalitarian manner. For details, please see:  "How much would each researcher receive if competitive government research funding were distributed equally among researchers?" by Krist Vaesen and Joel Katzav, September 8, 2017.
https://doi.org/10.1371/journal.pone.0183967

It is a complex task, and it also depends on what kind of research is considered.

For fundamental research, it should take into account multiple factors. The most important one should be how innovative the research direction is and how much knowledge will be gained from it. Indeed, the goal of fundamental research is to understand the world around us. 
The "potential impact on society" is not predictable when doing fundamental research as the goal is to push your field(s) forward and explore the unknown. 
The "track record of the research group" creates a self-fulfilling mechanism where the one who did good once keeps getting money. In the end, this can prevent innovation as it makes it very difficult for a new group with potential groundbreaking ideas to get funded. 

The "likelihood of commercialization" is almost irrelevant in fundamental research settings as your goal is to understand the world around you, applications are years away.
So, in the end, these three aspects should not be a major factor in a fundamental research funding scheme.
 
For applied research (medical research, military research, or any case where the end goal is to obtain a “product”) things are different. Here, the goal is to understand something enough to use it or re-engineer it. The end goal is to have some sort of application. The specific of the application is clear or not at the beginning of the research project, but the end goal is to be able to use the knowledge gathered for something concrete. In this case, things such as the “impact on society” and “likelihood of commercialization” should be weighed significantly. The “history of the research group” should also matter. 

 

In both cases, an evaluation by the peers cannot be avoided or overlooked but it matters probably more in fundamental research than in applied research. 

Based on the potential impact on society and 
Based on the track record of the research team

1. Based on the potential enefit to human development index

Based on 5-year history of peer-reviewed articles published and all publications cited

1. Based on the potential impact on society

Allocation of government funds should be based on the significance of the proposal (the unmet need/potential gap in the knowledge), the approach adopted by the investigators in achieving the milestones, the innovative solution put forward in the proposal for addressing the gap or unmet need, the expertise of the investigators, and the facilities available for conducting the research.

Based on track record divided by funds allocated in the last 5 years. 

In my opinion, I would say that it has to be a combination of all the above options giving more weightage to the potential (positive) impact on the society. Weightage (out of 100) can be 

The government should allocate scientific research funding based on:
1. Identify potential fields where research needs to be done in context of the country.
2. Allocate funds based on the population of the country.
3. Allocate funds for areas which are internationally relevant
4. Should make the country self reliant 

Based on peer review, excluding networks. Groups must use validated methods appreciated worldwide.

Best

Based on a peer-review process, with clearly defined criteria depending on the call. 

Based on the track record of the research team and Based on the potential impact on society.

From my experience the research team experience and record in field is very important, and also the potential impact. This two are complementary for a good research with valuable results.