Explain the process of fiscal decentralization in India.

 Fiscal decentralisation refers to the principles and practices concerning functional or expenditure responsibilities, revenue assignment and rectification of vertical and horizontal imbalances. In a broader sense, fiscal decentralisation is the fiscal empowerment of lower tiers of the government.In recent years, the subject of fiscal decentralization has received enthusiastic attention from academic analysts and policy makers alike. Most analysts find inherent merit in decentralization; often it is considered to be a component of human wellbeing and therefore, an end in itself. In decentralization, the policy makers see a penacea for many ills afflicting the society. It is expected to achieve many things such as enable efficient allocation of resources, improve governance, accelerate economic growth, reduce poverty, achieve a gender balance and empower weaker sections of society. This enthusiasm is seen in countries with federal constitutions as with unitary systems; it has spanned across countries with different ideological spectrum and varying level of development. Of course, there have been a variety of reasons and motivations for decentralization in different countries. These include democratization of polity, advent of multi-party system, transition from planned to market economy and accommodating diverse ethnic, linguistic and religious identities (Litvack, Ahmad and Bird, 1998). Much of the analyses, however, are based on the preconceived notion that decentralization will necessarily result in more efficient delivery of public services irrespective of the institutional setting, capacity of the institutions and economic environment in which they are rooted. Empirical evidence points towards important preconditions for decentralization to achieve efficient and equitable delivery of public services. The experiences in developing countries in particular, underline the fact that there is much to be done to create appropriate conditions for fiscal decentralization to be successful in achieving its objectives. Tanzi's (1996) contribution in this area is in cautioning us that even in achieving allocative efficiency, a number of preconditions must be met for the decentralization to be successful. The co-ordination requirements between different governmental levels are even more stringent in regard to achieving effective macroeconomic stabilization and desired State of redistribution. The problems are particularly severe in developing and transitional countries.Among developing countries, India with a federal constitution is a _____ ___ ________ __________ ___ ___ ____ _____.
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