Social sector with the objective to satisfy the welfare needs of the people and to correct the imbalances in the economy claims a sizeable proportion of the public expenditure and has emerged as a significant sector. This paper in this regard is a state level analysis on the growth of public expenditure vis-à-vis status of social sector in India using secondary data for the period from 1990-91 to 2012-13. Status of social sector has been ascertained through construction of composite indices based on available important techniques using 12 indicators variables on health and education. The findings reveal that in India, especially after the year 2000-01, the allocation of resources on the social sector has gained momentum. It is observed that population-wise smaller states such as Mizoram, Sikkim, Meghalaya, Himachal Pradesh, Goa, Puducherry and Uttarakhand with more development-oriented attitude have achieved a good progress on social sector. On the other hand, states such as Punjab, Kerala, Jharkhand, Bihar, W. Bengal, Nagaland, Tamil Nadu and Tripura are at the lower end. To further improve the status of social sector in different states/UTs it is important that the public expenditure on this sector keeps its pace undaunted, but, perhaps, it is more important that fiscal and financial management is streamlined and its governance is improved.
