As per the increased devolution suggested in the report of the 14th Finance Commission, the states will get Rs 3.48 lakh crore in 2014-15 and Rs 5.26 lakh crore in 2015-16.
"The higher tax devolution will allow states greater autonomy in financing and designing of schemes as per their needs and requirements," the report said.
While Abhijit Sen, part-time member of the Commission headed by Y V Reddy, gave a dissenting note, the government has accepted the majority decision on tax devolution to the states.
Sen, in his note, favoured devolution of 38 percent of the  divisible pool in the first year.
After assessing the revenue and expenditure of the states for the period 2015-20, the Commission has recommended a grant of Rs 1.94 crore to meet the deficit of 11 states.
Keeping in the mind the spirit of cooperative federalism that has underpinned the creation of NITI, Aayog the government has accepted the recommendation of FFC to keep the states share of Union Tax proceed (net) at 42 percent, official sources said.
Observing that states will see a quantum jump in transfers, sources said: "This is the largest ever change in the percentage of devolution. In the past, when Finance Commissions have recommended an increase, it has been in the range of 1-2 percent increase.

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