Drawing on a two-year study of decentralisation processes at State, district and village levels in Andhra Pradesh, Madhya Pradesh and Karnataka, this paper considers the influence of political economy factors on decentralised natural resource management in India. The paper assesses the constraints and potentials for decentralisation that are posed by the current political economy. It argues that centralising political forces constrain both the political and ecological scope of the decentralisation agenda. The suggested way forward is a more strategic approach in concept and practice, as well as a reconsideration of the ultimate objectives of decentralised natural resource management.