Finance Commission recommends higher share of central taxes to states

According to the report, the states will get Rs 3.48 lakh crore in 2014-15 and Rs 5.26 lakh crore in 2015-16.

The government on Tuesday accepted the recommendations made by the 14th Finance Commission report.

Prime Minister Narendra Modi has written to all Chief Ministers, informing them of the Government's decision to "wholeheartedly accept" the recommendations of the 14th Finance Commission.

Accepting the recommendation, Modi wrote: "You are aware that ever since our Government came into office, I have been working to strengthen our federal polity and promote cooperative federalism. The people of the country have high expectations from their governments and do not want to wait. Therefore, since the very beginning, we have been committed to a rapid and inclusive process of growth."

"Looking to the diversity of the country, we understand that real and functional Federal Governance is the only vehicle to achieve this objective quickly and holistically," Modi stated.

Addressing the Chief Ministers, he wrote: "I sincerely believe that strong states are the foundation of a strong India. Even as Chief Minister, I had been saying that the progress of the country depends on the progress of states. This Government is, therefore, committed to the idea of empowering states in all possible ways."

" We also believe that states should be allowed to chalk out their programmes and schemes with greater financial strength and autonomy, while observing financial prudence and discipline. We are clear that without this, local development needs cannot be met and marginalised communities and backward regions cannot be brought into the mainstream," he wrote.