NEW DELHI: Union Finance Minister Nirmala Sitharaman on Friday proposed settingup of an Economic Stabilisation Fund amid the ongoing West Asiacrisis.
Speaking in Parliament, the Finance Minister said the aim of this fundshould be to create fiscal headroom, enabling India to respond moreeffectively to global economic headwinds.
Responding to the discussion on the second batch of supplementarydemands for grants in Lok Sabha, Sitharaman said, “I would like tohighlight that the proposed Economic Stabilisation Fund will providefiscal headroom, allowing India to respond to global headwinds such asrecent crises, unanticipated supply chain disruptions, unexpectedshocks to sub-sectors of the Indian economy, and any other events thatmay have significant fiscal implications. In anticipation of whatcannot be foreseen, we are coming up with economic stabilisationmeasures”.
“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 BudgetEstimates (BE) for the year,” she said.
“There is no increase in expenditure beyond the BE of 2025–26 due tothe second supplementary,” she said.
The supplementary demands seek Parliament’s approval for grossadditional expenditure of over Rs 2.81 trillion for the financial year2025–26 (FY26). As part of the demands, the finance ministry has alsosought Rs 57,381.84 crore for the Economic Stabilisation Fund. Theproposal of the fund comes amid an energy supply crunch due to theWest Asia conflict.
As per the information shared by the Finance Ministry, thesupplementary demands involve a net cash outgo of Rs 2.01 trillion.
“The gross additional spending will be matched by savings of Rs80,145.71 crore across ministries and departments or by enhancedreceipts and recoveries,” the ministry said.
Further, the additional spending includes Rs 15,000 crore for thenutrient-based subsidy scheme under the Department of Fertilisers andRs 23,640 crore for subsidy support under the development action planof the Pradhan Mantri Garib Kalyan Anna Yojana.
The finance ministry has also sought an additional Rs 3,788 crore tomeet subsidy requirements under the interest equalisation support forlines of credit provided through the Indian Development and EconomicAssistance Scheme.
According to the Controller General of Accounts (CGA) data, tillJanuary, the government had spent Rs 36.90 lakh crore.
Agencies