In India, the third phase of Economic Reforms is underway. A full-fledged market economy characterised with growing inequality in income is theoretically accepted as means of wealth creation. Trust is admitted to be only political trust which is no way influenced by any economic or commercial transactions which are all subject to efficiency. This policy stance undermines the importance social sector expenditure in creating institutional level networks which provide for poor people access to resources. Analysis of data on social sector expenditure and its pattern and human development indicators shows that the present status is insufficient to promote human development, which is falling, in the country. Therefore, high growth rate of income must be accompanied with larger proportion of expenditure for social sectors.