Explanation:

Fiscal decentralization (FD) means devolution of power and responsibilities of national (central), government towards sub-national (local), governments.

Fiscal decentralization can take many forms including a) self-financing or cost recovery through user charges, b) co- financing or co-production arrangements through which the users participate in providing services and infrastructure through monetary or labor contributions; c) expansion of local revenues through property or sales taxes, or indirect charges. It also includes d) intergovernmental transfers that shift general revenues from taxes collected by the central government to local governments for general or specific uses; and e) authorization of municipal borrowing and the mobilization of either national or local government resources through  loan guarantees. This is captured in the idea that spending and tax decisions must reflect local preferences as far as possible. That is, the share of own revenues (compared to devolved sources) in total revenues at lower levels of government should also reflect local preferences.