Divisible Pool
Receipts Advancedविभाज्य पूल
Definition
The divisible pool is the portion of Central tax collections that is shared with states. It includes income tax, corporate tax, GST (Central share), customs duty, and union excise duty. However, cesses and surcharges are excluded from the divisible pool and are retained entirely by the Centre.
How Divisible Pool Appears in India's Budget
Growing reliance on cesses and surcharges (which are excluded from the divisible pool) has been a point of contention between Centre and states.
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Why Divisible Pool Matters
Understanding divisible pool is essential for anyone following government finances, preparing for competitive exams, or analysing India's economic policy. This concept directly affects how the government allocates resources and plans its fiscal strategy.
In the context of India's Union Budget 2026-27, with a total size of Rs 53.47 lakh crore, terms like divisible pool help citizens and analysts evaluate whether the government is on the right fiscal path. The numbers in the budget are only meaningful when one understands the underlying concepts.
For UPSC aspirants, divisible pool is frequently tested in both Prelims and Mains, particularly in Paper III (Economic Development). For CA and MBA students, this concept appears in public finance and macroeconomics courses.
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