This paper presents trends in public expenditures on social sector and poverty alleviation programmes from 1990-91. A considerable proportion of these expenditures is undertaken by the states but the central share seems to be increasing over time. This paper analyses trends in state expenditure, expenditure by the central government and central and state adjusted combined expenditures. Overall, expenditure on social sector schemes is increasing in real terms but mainly through increased expenditure of the central government. The state governments seem to be easing out of their constitutional commitment to sustain programmes in the social sectors, which is a matter of concern. Secondly, there are large inter-sectoral reallocations of funds in the poverty alleviation sectors. One major development has been that large funds that were allocated to employment generation have now been diverted to the rural road construction programme. This reallocation may have serious implications for employment generation.
