Decentralization evolved after the failure of centralized governance of India. To achieve good governance there is a need for the distribution of powers from central to local level. It also requires rule of law, transparency, and accountability and participatory decision­making. The initiatives of decentralization will reinforce poverty reduction policies. Kerala is the best example where the state government has given power to the local government in the decision­making. Jharkhand in spite of being a rich source of minerals, there is an unequal distribution of wealth, which leads the majority of the population into a vicious circle of poverty. Objectives: The aim of the study is to examine the role of local governance of Jharkhand in the term of economic performance and policy formulation in poverty reduction. Methodology: Empirical study consists of Hisri­Chauli village of Ranchi districts. Sources of data are both primary and secondary including field finding, government reports, international institution gazettes, article, journal, books, etc. Analysis: This study seeks to analyze the poverty reduction strategies in local governance simultaneously concentrating on the anti­poverty programs in rural areas. onclusion: This study will find out the issues, challenges and required action to be taken by the Jharkhand government for the holistic approach of development would eliminate the scope for regional and sub­regional bias.

Keywords: Decentralization; Jharkhand; Poverty; Local Governance.