---
title: "Divisible Pool of Taxes: India's Fiscal Federalism"
description: "The divisible pool of taxes is the share of central tax revenue shared with Indian states, crucial for equitable resource distribution."
url: "https://modeldiplomat.com/learn/glossary/divisible-pool-of-taxes"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- The divisible pool is the portion of central tax revenue that the Union of India shares with the states, distributed according to Finance Commission recommendations.
- Why are cesses and surcharges excluded from the divisible pool?
- What is the difference between vertical and horizontal devolution?
- How does GST revenue interact with the divisible pool?
- How does the divisible pool differ from grants-in-aid under Article 275?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

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In November 2020, the Fifteenth Finance Commission, chaired by N. K. Singh, recommended that 41 percent of the net divisible pool be devolved to states for the 2021–26 award period, down from the Fourteenth Commission's 42 percent.

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