Finance Minister Nirmala Sitharaman on Friday proposed in Parliament a Rs 1 lakh crore Economic Stabilisation Fund to provide the government with fiscal flexibility to respond to global economic uncertainties.
Replying to the debate on the second batch of supplementary demands for grants in the Lok Sabha, Sitharaman said, “The Rs 1 lakh crore Economic Stabilisation Fund will give fiscal headroom to allow India to respond to global headwinds,” Sitharaman said in the House.
She added that the fund is intended to act as a financial buffer in times of unexpected global shocks,
Further, she said that such a fund is crucial during unpredictable international developments, citing the current situation in West Asia as an example of external challenges that can affect economic stability.
The finance minister assured the House, “There is no increase in expenditure beyond the Budget Estimates of 2025-26 due to the second supplementary, and the fiscal deficit for FY 2025-26 will remain within the Revised Estimates (RE),” Sitharaman said.
The government has sought the Lok Sabha’s approval for additional spending of Rs 2.81 lakh crore through the second batch of supplementary demands for grants in the ongoing financial year. With additional receipts of Rs 80,000 crore, the net additional cash outgo is estimated at Rs 2.01 lakh crore.
The government has also revised the total expenditure for the current fiscal year to Rs 49.65 lakh crore, down from the Budget Estimate of Rs 50.65 lakh crore. According to the Revised Estimates, the fiscal deficit for 2025-26 is projected at 4.4 per cent of GDP, unchanged from the Budget Estimates.
The supplementary demands include Rs 1 lakh crore for the Economic Stabilisation Fund, Rs 19,230 crore for fertiliser subsidies, and Rs 23,641 crore for subsidies under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).
However, Other major allocations include Rs 41,822 crore for the defence ministry.
Reassuring farmers, Sitharaman also said, “There will be no shortage of fertilisers for farmers,” she said.
