Though the literature on federalism explains the economic gains from decentralised decision making and related issues in India, there are very few empirical studies examining the causal relationship between decentralisation and development outcomes. Much of the demonstrated gains are in the nature of assertions or qualitative statements. This study, attempts to analyse and quantify the impact of decentralisation in India on its social infrastructure that needs to be supplied by governments as they are not optimally provided by the private sector and on rural development where about 70% of the population live.