FISCAL DECENTRALIZATION AS A LEGAL ENTERPRISE: STATUTORY FRAMEWORKS, JUDICIAL OVERSIGHT, AND CONSTITUTIONAL IMPERATIVES

AUTHOR – ISA MARIAM JACOB,STUDENT AT SCHOOL OF LAW, CHRIST (DEEMED TO BE UNIVERSITY), BENGALURU

BEST CITATION – ISA MARIAM JACOB, FISCAL DECENTRALIZATION AS A LEGAL ENTERPRISE: STATUTORY FRAMEWORKS, JUDICIAL OVERSIGHT, AND CONSTITUTIONAL IMPERATIVES, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (2) OF 2026, PG. 642-651, APIS – 3920 – 0001 & ISSN – 2583-2344. DOI – https://doi.org/10.65393/BVKC6101

ABSTRACT

How much do local governments have enforceable rights under India’s constitutional framework for fiscal decentralization, and how may judicial and legislative actions turn decentralization from a constitutional goal into a legally binding reality?

Fiscal decentralization has come to be one of the defining motifs of current governance and development debates. By shifting fiscal power from the central to subnational authorities, decentralization holds the potential to enhance delivery efficiency of services, encourage accountability, and deepen democratic engagement. However, the institutional and legal framework that underpins fiscal decentralization is not yet well-explored, especially in the Global South. The doctrinal examination of statutory schemes, constitutional architecture, and case law demonstrates that fiscal decentralization is neither a linear nor a uniform process, but an arena of contest over central power and local self-rule. This paper questions the conceptual bases, evolutionary development, and legislative foundations of fiscal decentralization. It shows that decentralization is not a panacea nor a technocratic tool per se but is deeply rooted in the political economy of state building and the intergovernmental legal design. The core argument set forth here is that without the availability of a strong legal framework to bind revenue assignments, expenditure responsibilities, and intergovernmental transfers to enforceable accountability arrangements, fiscal decentralization becomes a hollow promise. The Indian setting, characterized by constitutional directives but unbalanced statutory execution, offers an important location for exploring how doctrinal definition might convert fiscal decentralization into a political substance from a figural aspiration.

Keywords: Fiscal decentralization, local governance, intergovernmental relations, statutory framework, accountability, rural development, fiscal federalism.