Kolkata: To protect the nation from unforeseen emergency situations as the current one in West Asia, Finance Minister Nirmala Sitharaman has proposed an Economic Stabilisation Fund of Rs 1 lakh crore. According to FM Sitharaman, this fund will be a cushion in crisis situations when policymakers need fiscal headroom to rise up to the challenge.
This week, the government has sought approval from Parliament for additional spending of Rs 2.81 lakh crore. Part of this amount will be compensated by savings and higher receipts from ministries and departments. She mentioned the fund when replying to the debate on the second batch of supplementary demands for grants in the lower house of the Parliament. “The Rs 1 lakh crore Economic Stabilisation Fund will give fiscal headroom to allow India to respond to global headwinds,” she said.
No increase beyond budget estimates
With additional receipts of Rs 80,000 crore budgeted for the current fiscal year, the net additional expenditure will be around Rs 2.01 lakh crore. The FM highlighted that the fiscal deficit for FY26 will be within the revised estimates. The revised estimates or FY26 stands at 4.4% of the GDP and is in line with the budget estimates of FY26. “There is no increase in expenditure beyond the BE of 2025-26 due to the second supplementary,” Sitharaman said.
Fertiliser subsidy
In India fertilizer prices is a matter of great importance both economically and politically. The Iran US war has put great strain on the country’s fertiliser subsidy bill. The closure of shipping lines through the Strait of Hormuz, a key corridor for global fertiliser shipments, has triggered a rise in prices of fertilisers such as urea and ammonia. On the other hand, its has also caused a disruption to supply of gases which are needed for fertilizer production in the country. The approval of the Parliament was sought for additional expenditure of Rs 19,230 crore towards fertilisers’ subsidy and Rs 23,641 crore for subsidies under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY). The FM told the Parliament that she will ensure no shortfall in funds for fertiliser subsidies for farmers.
Cut in expenditure
Significantly, in the revised estimates for FY26, the government had trimmed total expenditure from Rs 50.65 lakh crore in the budget estimates to Rs 49.65 lakh crore. Controller General of Accounts (CGA) data showed that the administration spent Rs 36.90 lakh crore till the end oof Jan 2026. The supplementary demands for grants included the expenditure towards setting up of the Economic Stabilisation Fund.