In a letter to Chief Ministers, Prime Minister Narendra Modi said: “We have wholeheartedly accepted the recommendations of the 14th Finance Commission, although it puts a tremendous strain on the Centre’s finances... following the acceptance of the recommendations, we are moving away from rigid centralised planning, forcing a ‘one size fits all’ approach on States... The additional 10 per cent of resources being devolved will give you this freedom.”
The Centre rejected the dissent note to the FFC report from its member Abhijeet Sen recommending a lower States’ share of 38 per cent in 2015-16.
“The consequence of this much greater devolution to States is that the space for the Centre will reduce in the same proportion,” an official release said.
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Union Finance Minister Arun Jaitley told reporters after tabling the FFC report in both Houses of Parliament on Tuesday: “Such a substantial hike in the States’ share was never given before… this is the largest ever change in the percentage of devolution… hikes recommended in the past were in the range of 1-2 per cent.” .