Economic Reform and Social Sector Expenditures: A Study of Fifteen Indian States 1980/81-1999/2000

Tsujita Yuko

No 31, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

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; Economic policy; India; 公共支出; 経済政策; インド (search for similar items in EconPapers)
JEL-codes: H51 H52 H72 I19 I22 (search for similar items in EconPapers)
Date: 2005-06-01
New Economics Papers: this item is included in nep-cwa, nep-his and nep-pbe
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 31. 2005-06-01

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