Prime Minister Narendra Modi, in a meeting with 35 first-time Maharashtra MLAs suggested that additional funds and resources disposal of states should be directed primarily towards nation building. The Minister, while highlighting the union government`s initiatives towards cooperative federalism, underscored that states have been allocated 62% of the total resources in the union budget, while only 38% have been left for use by the Centre.
Further, the minister also emphasized upon the government’s acceptance of the recommendations of the 14th Finance Commission regarding devolution of 42% of the divisible pool of taxes to states and expressed the desire of sharing the proceeds of coal auctions and the enhanced mineral royalties with states.
According to recommendations of the 14th Finance Commission, States will get a much higher share of central taxes, as the government accepted the 14th Finance Commission’s recommendation to devolve an unprecedented 42 per cent of the divisible pool to states during 20015-16 to 2019-20, against 32 per cent suggested by the previous commission. This means in 2015-16, states will receive Rs 5.79 lakh crore of the Centre’s expected gross tax receipts of Rs 15.67 lakh crore. The share of states will rise 51.55 per cent compared to the 2014-15 estimate of Rs 3.82 lakh crore.