Decentralization and Its Impact on Growth in India

We study the effect of revenue decentralization (RD) and expenditure (ED) on sub-national growth in India from 1981–1982 to 2015–2016 for 14 large (non-special-category) states. Our provides evidence that both RD ED play a defining role India’s this three-and-a-half-decade period. use panel data model with fixed effects (FE) Driscoll Kraay standard errors control heteroscedasticity, autocorrelation cross-sectional dependence. To test causality between decentralization, we Granger non-causality test. The regression analysis is supplemented distribution dynamics approach. find that: (a) While Granger-caused economic growth, reverse was not significant; (b) Economic increased significantly after liberalization; (c) Decentralization, capital social had significant positive impacts growth; (d) States high levels also per capita income, while states low exhibited income.