Social Sector Expenditure in India in the 2000s: Trends and Implications

Abstract Acknowledging the contribution of social infrastructure towards building up human capital, this article analyses the trend and pattern of social sector expenditure in India in the 2000s. Rhetorical commitment of successive Indian governments towards inclusive social development and poverty alleviation in the 2000s has not been backed up by adequate financial allocations and this has merely served to maintain the status quo on social sector spending. The new pattern of tax shares between the centre and states has resulted in higher inflow of ‘untied fund’ from the central government accompanied by lower allocations of ‘tied fund’. Subsequently, states have not exhibited any definitive sign of using their newly accrued fiscal autonomy to prioritise social sector expenditure. Along with greater public investment for development of human resources, this article emphasises on the need for appropriate monitoring and evaluation framework, and change in the budget making policy with greater involvement of people directly affected by changes in public policies related to social sector