Reports
Discussion Papers
No.031 Economic Reform and Social Sector Expenditures: A Study of Fifteen Indian States 1980/81-1999/2000
by TSUJITA Yuko
June 2005
ABSTRACT
This
paper
examines
social
sector
expenditures
in
fifteen
Indian
states
between
1980/81
and
1999/2000
to
find
out
whether
the
far-reaching
economic
reforms
that
began
in
1991
had
any
significant
impact
on
the
level
and
trend
of
these
expenditures;
and
if
there
was
any
such
impact,
what
were
the
reasons
behind
the
ensuing
changes.
The
empirical
analysis
in
this
study
shows
that
revenue
became
a
major
determinant
of
social
sector
expenditures
from
the
mid
1980s
with
the
result
that
real
per
capita
social
sector
expenditures
in
most
states
started
to
decline
even
before
the
economic
reforms
began
as
states'
fiscal
deficits
worsened
in
the
1980s.
Economic
reforms,
therefore,
largely
did
not
have
a
major
negative
impact
on
expenditures.
In
fact
there
was
a
positive
impact
on
some
states,
which
often
were
those
that
received
more
foreign
aid
than
other
states.
By
the
late
1990s,
states
expending
more
on
the
social
sector
changed
from
states
with
a
traditionally
strong
commitment
to
the
social
sector,
such
as
Kerala,
to
states
having
higher
revenues
including
aid
from
outside
the
country.
Keywords:
economic
reform,
public
expenditures,
social
sector,
India
JEL
classification:
H51,
H52,
H72,
I19,
I22
Please note that discussion papers are works in various stages of progress and most have not been edited and proofread and may contain errors of fact or judgment. Revised versions of these papers may subsequently appear in more formal publication series. The views expressed in this publication are those of the author(s). The IDE does not guarantee the accuracy of the data included and accepts no responsibility for any consequences arising from its use.