London, April 2 (IANS): British Secretary of State for Scotland Alistair Carmichael has welcomed the transfer of more fiscal powers from London to Edinburgh in the coming two years, urging Scotland to pursue a path of "devolution" rather than "independence".

The financial powers to be transferred to Scotland's local legislature in 2015 and 2016 include extended borrowing powers, a new Scottish income tax rate, and the power to create new devolved taxes in line with agreement between both governments.

Based on the Scotland Act 2012 approved by London and Edinburgh, the transfer will allow Scotland to gain a higher degree of economic autonomy.

Describing the power devolution as "a major milestone" for Scotland, Carmichael Tuesday said the legislation provides "the largest transfer of financial powers to Scotland in over 300 years", Xinhua reported

"As part of the United Kingdom, Scotland has got the best of both worlds: a strong Scottish parliament with financial powers that can make decisions on those things that affect our everyday lives," he said.

With fewer than 200 days to go before the Scottish independence referendum is held Sep 18 this year, London and Edinburgh have been wrangling to win supporters for their respective agenda over Scotland's future.

The Scottish government and its ruling Scottish National Party have been campaigning for Scotland's independence, saying that being an independent country can create a "more democratic, more prosperous and fairer" society for Scotland.

British Prime Minister David Cameron and Scottish First Minister Alex Salmond signed the Edinburgh Agreement in October 2012 to allow Scotland to hold an independence referendum this year.