'Decentralisation' has become a keyword in recent development economics and polity. The government of West Bengal has been pursuing the strategy of decentralised planning to promote rural as well as urban development since the beginning of the Seventh Five-Year Plan (1985-90). Authority for planning has been devolved from the state to the municipalities for municipal development and to the panchayats for development of non-municipal towns and rural areas. Following the 73^rd and 74^th Constitution Amendment Acts in 1992, and the creation of the State Finance Commission in 1992 and the submission of its report in 1995, the District Planning Committee has been given a constitutional status. This has strengthened rural and urban self-governing institutions. Planned investment is being distributed through elected panchayats and municipalities to the effect that at present 50 per cent of total annual plan expenditure in West Bengal is decided at the district Level.

Panchayats are involved in various development activities such as planning of tube well development at the local level management of minor irrigation schemes, co-ordination between government departments, agricultural extension work, regulation of water markets etc. Consequently, West Bengal recorded the highest rate of growth in agricultural production amongst the eastern states between 1981 and 1991, the growth rate of net value added in agriculture being 6.85 per cent in the 1980s as compared to 2.3 per cent in the 1970s. The notable characteristic of the 1980s is that this high growth rate occurred in all districts excepting Darjeeling and Jalpaiguri, in contrast to the concentration of high growth rates in districts around Calcutta and Burdwan during the 1970s. It has also been observed that West Bengal experienced one of the highest rates of growth in rice production during the 1980s.

This impressive agricultural growth - accompanied by commercialisation of agriculture across the districts of the state - has gone hand in hand with increased non-agricultural activities like small-scale manufacturing and trade in agricultural commodities, which have again boosted a rapid growth of small towns. While the districts vary significantly as regards level of urbanisation, this variation in the level of urbanisation across the districts in 1991 is to be seen in the context of agricultural productivity, percentage of area under commercial crops, and the percentage of industrial workers in the total workforce of individual districts - the coefficients of the independent variables being significant at 5 per cent or 10 per cent level.

At the municipal level, per capita revenue expenditure as well as per capita expenditure per sq. km. during the period from 1975-76 to 1993-94 increased at a higher rate for non-metropolitan municipal towns (231 per cent) than metropolitan towns (131 per cent). This has enabled the former to enhance their expenditure on civic amenities like water supply, lighting, conservancy etc. It has been observed that this significantly explains the variation in urban population growth across the municipal towns in revenue expenditure per sq. km, on civic amenities, the coefficient of the independent variable being significant at one per cent level. Besides, the urban poverty alleviation programmes, namely Nehru Rojgar Yojana, Urban Basic Services for Poor and Prime Minister's Poverty Eradication Programme are being implemented at the grass-root level through involvement of the people.