The article examines how giving more financial power to states in India affects their economic growth. By creating a social development index, the author categorizes states as developed or under-developed based on education and health. The study shows that when states have more control over spending and revenue, it usually helps the economy grow. However, this effect is smaller in developed states. This suggests that the impact of financial decentralization on economic growth varies across different states in India. The findings suggest that the way money is shared between the central government and states needs to be re-evaluated to improve policies.