New Delhi, March 13 (UNI) Union Finance Minister Nirmala Sitharaman on Friday proposed setting up an Economic Stabilisation Fund amid the ongoing West Asia crisis.
Speaking in the Parliament, the Finance Minister said the aim of the fund is to create fiscal headroom, enabling India to respond more effectively to global economic headwinds.
Responding to the discussion on the second batch of supplementary demands for grants in the Lok Sabha, Sitharaman highlighted that the proposed “Economic Stabilisation Fund will provide fiscal headroom, allowing India to respond to global headwinds such as recent crises, unanticipated supply chain disruptions, unexpected shocks to sub-sectors of the Indian economy, and any other events that may have significant fiscal implications.”
“In anticipation of what cannot be foreseen, we are introducing economic stabilisation measures,” she added.
“The fiscal deficit for FY26 will remain within the Revised Estimates (RE), which projects it at 4.4% of GDP, the same level as the Budget Estimates (BE) for the year,” she said.
“There is no increase in expenditure beyond the BE of 2025–26 due to the second supplementary,” she said.
The supplementary demands seek Parliament’s approval for gross additional expenditure of over Rs 2.81 trillion for the financial year 2025-26 (FY26). As part of the demands, the finance ministry has also sought Rs 57,381.84 crore for the Economic Stabilisation Fund. The proposal of the fund comes amid an energy supply crunch due to the West Asia conflict.
As per the information shared by the Finance Ministry, the supplementary demands involve a net cash outgo of Rs 2.01 trillion.
“The gross additional spending will be matched by savings of Rs 80,145.71 crore across ministries and departments or by enhanced receipts and recoveries,” the ministry said.
Further, the additional spending includes Rs 15,000 crore for the nutrient-based subsidy scheme under the Department of Fertilisers and Rs 23,640 crore for subsidy support under the development action plan of the Pradhan Mantri Garib Kalyan Anna Yojana.
The finance ministry has also sought an additional Rs 3,788 crore to meet subsidy requirements under the interest equalisation support for lines of credit provided through the Indian Development and Economic Assistance Scheme.
According to the Controller General of Accounts (CGA) data, till January, the government had spent Rs 36.90 lakh crore.
