New Delhi (TIP): The government sought, and received Rs 57,381.84 crore for the Economic Stablisation Fund as part of the supplementary grants for 2025-26, with Union finance minister Nirmala Sitharaman telling the Lok Sabha on Friday that this would “provide fiscal headroom to allow India to respond to the global headwinds.” The fund will allow the government to respond to unanticipated supply chain disruptions and unexpected shocks to the Indian economy, the minister added.
While the fund was not part of the original budget for 2025-26, according to the budget documents for 2026-27 presented on February 1, it was mentioned as part of the revised estimate (RE) for 2025-26, with Rs 50,000 crore being allocated for it. The stablisation fund was placed under the reserve funds of the department of economic affairs or DEA.
On Friday, March 13, Sitharaman said the Rs 2.01 lakh crore net supplementary demand for grants for 2025-26 would not change the fiscal deficit numbers. The demand was passed on Friday after a debate.
The finance minister sought approval of the Parliament for expenditure requirements related to 61 grants, involving a gross expenditure of about Rs 2.81 lakh crore, and a net cash outgo of Rs 2.01 lakh crore.
The Union budget presented on February 1 this year stipulated India’s fiscal deficit at 4.4% of GDP in the revised estimate (RE) for 2025-26, and continuing on the path of fiscal consolidation, set 4.3% as the fiscal deficit target for 2026-27 (BE).
Details of how the Economic Stabilisation Fund will be utilised were not immediately available, although people familiar with the matter in government said the money would go towards protecting consumers from price shocks caused by the recent spike in energy prices on account of the Us-Israel war on Iran, and making supply chains for critical commodities more resilent.
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