New Delhi: The 14th Finance Commission in a bonanza recommended a record 10 percent hike in the states’ share in the Union taxes to 42 percent, which has been accepted by the Centre and will give the states an additional Rs 1.78 lakh crore in 2015-16.
Headed by former RBI Governor Y V Reddy, the report of the Commission also recommended a grants-in-aid of Rs 48,906 crore for 11 revenue deficit states, including Andhra Pradesh post division, West Bengal and Jammu and Kashmir, for 2015-16. For the period up to 2020, it will be over Rs 1.94 lakh crore.
The total devolution to the states in 2015-16 will be Rs 5.26 lakh crore, as against Rs 3.48 lakh crore in 2014-15, representing an increase of Rs 1.78 lakh crore. The total devolution to states during the five year period up to 2019-20 will be Rs 39.48 lakh crore. Addressing a press conference, Finance Minister Arun Jaitley said the Centre has accepted the recommendations of the Finance Commission and it shows NDA government’s commitment to cooperative federalism.
