States should use extra funds to develop productive assets: Jaitley

Stressing that states play an important role in the national economy, Union Finance Minister Arun Jaitley on Tuesday said that the 14th Finance Commission has increased the share of states in the divisible pool from 32 percent to 42 percent.

"If the Chief Ministers of states are being empowered with additional resources, then we have every reason to believe that this money will be well spent. The money will be well spent on poverty, infrastructure and therefore every spending within the territory of India, whether by the central or the state government is going to add to the growth process," Jaitley told the media.

"Every state government, irrespective of the party that governs the state, would also be interested in the welfare of its own people. A principle issue raised by Prime Minister Narendra Modi during his Lok Sabha campaign was that states cannot indefinitely keep looking at Delhi," he added.

Earlier in the day, Prime Minister Modi wrote to the Chief Ministers of the nation, informing them of the Government's decision to wholeheartedly accept the recommendations of the 14th Finance Commission.

"We are 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," his letter read.