Decentralization is the process of transferring financial resources and responsibilities from the central government to sub-national levels of governance. The objective of fiscal decentralization is to promote local development and service delivery through the effective utilization of resources by local governments. The present study explores the impact of fiscal decentralization on rural development through Panchayati Raj Institutions (PRIs) in India. The study is based on a review of the literature, analysis of secondary data, and interviews with key stakeholders. The paper focuses on the following research questions: What is the role of PRIs in rural development? How has fiscal decentralization impacted rural development in India? And what are the challenges faced by PRIs in implementing fiscal decentralization? The findings of the study suggest that fiscal decentralization has been a significant driver of rural development in India through PRIs. PRIs have emerged as powerful agents of change in rural areas, promoting local development and service delivery. The transfer of financial resources and responsibilities to PRIs has led to the development of infrastructure, such as roads, schools, health centers, and water supply, in rural areas. Additionally, PRIs have played an essential role in empowering rural communities, promoting local participation and decision-making, and ensuring greater accountability and transparency in governance. However, the study also highlights several challenges faced by PRIs in implementing fiscal decentralization, including inadequate resources, capacity constraints, and political interference. Moreover, the study finds that there is a need for greater coordination between PRIs and higher levels of decentralization. government to ensure the effective implementation of fiscal Overall, the study concludes that fiscal decentralization through PRIs has had a significant impact on rural development in India. However, there is a need to address the challenges faced by PRIs to realize the full potential of fiscal decentralization in promoting local development and service delivery.

Decentralization, Public Service Delivery, Local Government