Some of the major factors responsible for adoption of decentralized economic planning in India are as follows:

1. Planning Becomes Realistic And Flexible:

Decentralized planning a micro level planning is considered as more realistic as it maintain a close coordination between locally available resources, local skills, local manpower and local requirements.

It is considered as a flexible one as it is easily adjustable and adaptable under the changing local conditions and requirements.


Moreover, it is practical one as it can fulfill the normal requirements of the rural population. Adaptation and flexibility of planning largely depends upon the environment prevailing in each region and sub- region. Thus decentralized planning can achieve the best result in implementing plan projects according to local needs.

2. Better Linkages between Villages and Small Towns:

Considering the huge size and proportion of rural population in India, it is observed that proper linkages must be established between far away small villages between adjacent small towns by developing appropriate infrastructural facilities like roads, improved transport facilities, marketing and storage facilities, health and sanitation facilities viz., panchayat house, village roads, schools, tanks etc. which can supplement rural income.

It also helps to raise the standard of living of the rural population and other welfare activities. Under decentralized planning, better linkages between villages and small towns can be established under local conditions, priorities and resources.


3. Promote People’s Participation:

Decentralized planning can promote active participation of local people in implementing various local programmes. Thus it can involve local communities in such development activities.

4. Development of Agriculture:

Decentralized planning or micro level planning is suitable for the development of agricultural and allied activities such as animal husbandry, horticulture, fisheries, forestry along with development of village and cottage industries.


5. Minimizing Wastage of resources:

Wastage of resources can be reduced to a minimum under micro level planning. It is because people participating in these developmental activities keep close watch over the utilization of fund as well also on the implementation of plan projects.

6. Trickle down Effects:

Decentralized planning can show more trickle down effects in respect of poverty alleviation programmes and employment generation in rural areas. Various projects are selected for generating huge productive employment opportunities in the rural areas under this type of planning. Moreover, this can built up various types of community assets.

7. Social Services:

Decentralized planning are helpful in raising the level of social services by launching various programmes such as, health nutrition, drinking water, education etc. in a more effective and quicker way.

8. Use of Non-conventional energy sources:

Decentralized planning is helpful in utilizing the various non-conventional energy sources such as solar power, wind, animal and plant wastes etc. in rural areas. Such utilization on non-conventional energy sources requires various agencies which can work in close association in villages and small towns and also can provide necessary technical and financial support from such agencies. Decentralized planning can pave the way for utilization of such resources in better manner.

9. Simple Planning process:


Decentralized planning process is more simple and transparent. It has a close link with democracy, co-operation and development. It has a vast scope for the active involvement of political and social forces at the suitable level.