India being a federal country, all the three tiers of the government carry out expenditures on both education and health. In India, the education and health sectors services are provided both by the public as well as by the private institutions. While, the private institutions are guided by the market and profit motive, on the other hand, the public institutions are guided by the main motive of rendering services and to enhance human capital. As the cost of education and health facilities provided by private institutions is higher, so it is difficult for the majority of population to avail these services because of their economic inability. Thus, it is very important for the government to provide quality education and health facilities to this section of the population. Moreover, private institutions are unable to reach remote and rural areas where people lack initiative for education and health. In this context, the role of government to encourage them and to make them aware of advantages of education and health cannot be substituted. In addition, there are some underprivileged sections of population like, ST, SC, OBC, the interests of whose can only be protected by the interference of government. Moreover, people as individual consumers do not have complete information about the quality of services and the related costs. This often leads to exploitation of people. Hence, government intervention in health and education sector is must in order to enhance the quality of human capital.