Decentralization and economic development: Indian experience

Decentralization has come to be rediscovered in the post-cold war period as an effective means of achieving higher growth rate of GDP in both develope d and developing countries. India opted for a quasi-federal political set-u p to unify culturally diverse ethnic groups. But it resorted to unbridled c entralization of economic policy making and as a result it failed to achiev e higher rate of growth of GDP. Recently India has created another tier of decentralized units to increase the pace of development. This second wave o f decentralization has been followed by the policy of economic liberalizati on and globalization. In order to make decentralization to promote higher g rowth of GDP in a liberalized economic environment, it is necessary to ensu re that autonomy goes with transparency and accountability.