INSTITUTE OF PUBLIC FINANCE AND POLICY (IPFP)
WHO: Institute Of Public Finance And Policy (IPFP)
WHERE: Bhubaneswar, Odisha
WHAT: Social Sector Expenditure S. Growth.
WHY: Investment in social sector creates human capital which further contributes to the growth process. The human capital approach entails that investment in health and education creates capacity to build human capital and this leads to enhance productivity, encouraging higher economic growth. Over the last one decade and more, Indian states have witnessed rapid economic growth. The critical question here is whether the higher growth has translated in reducing inequality.
HOW: This has been investigated by examining the social sector expenditure and corresponding development outcomes across states. The evidence from the study suggests that some of the states where the rate of growth of per capita income was more, social service expenditure did not increase adequately. For instance, the per capita real income growth was 8 percent in Gujarat (2000-01 to 2013-14) and 7 percent in Maharashtra, in comparison to 4 and 5 percent growth in real per capita social service expenditure in the two states respectively. This to a large extent validates the fact that higher growth has not translated in higher growth of social service expenditure.