Patterns of Social Sector Expenditures: Pre- and Post-reform period

Introduction: Throughout the history of Independent India, the Indian government has claimed that it works towards social development and the eradication of poverty. On the eve of Independence, Jawaharlal Nehru, addressing the Constituent Assembly, declared that Independence meant the redemption of a pledge. But he also stated that this achievement “is but a step, an opening of opportunity, to the great triumphs and achievements that await us (...) the ending of poverty and ignorance and disease and inequality of opportunity”. A lot has been achieved in the past half century. The incidence of poverty has declined from over 50 per cent in the 1950s to less than 30 per cent in the late 1990s.3 The literacy rate has increased from less than 20 per cent in 1951 to 65 per cent in 2001. According to recent Human Development Reports published by the UNDP, India moved from the category of ‘low’ human development to that of ‘medium’ human development and its rank in 2003 was 127 (of 175 countries). Nevertheless, the performance of India in the social sector is far from satisfactory, and could have been much better (Dreze and Sen, 1995).