Eco Stabilisation Fund to give fiscal headroom to tackle global shocks: FM
New Delhi, March 13, 2026
Finance Minister Nirmala Sitharaman told Lok Sabha the Rs 1 trillion Economic Stabilisation Fund will help India respond to global shocks while keeping fiscal consolidation targets intact
The Rs 1 trillion Economic Stabilisation Fund will provide fiscal headroom to allow India to respond to global headwinds such as the recent crisis in the Gulf region, unanticipated supply chain disruptions and shocks to sub-sectors in the Indian economy without deviating from the fiscal consolidation roadmap, Finance Minister Nirmala Sitharaman told Lok Sabha on Friday.
Replying to the discussion on the second Supplementary Demand for Grants, the finance minister said that the fund is proposed to be met partly through existing appropriation and additional allocation.
“The commitment given in this House inclusive of the second Supplementary Demand for Grants will be within the fiscal deficit target presented in Parliament,” Sitharaman said amid Opposition members sloganeering over LPG shortage concerns.
To meet any sudden economic shocks, the finance ministry doubled the allocation for the Economic Stabilisation Fund to Rs 1 trillion for FY26 as part of the second Supplementary Demands for Grants tabled in Parliament on Tuesday. It also allocated an additional expenditure of Rs 19,230 crore on account of fertiliser subsidies and Rs 23,640 crore for food subsidies for FY26. The second batch of the Supplementary Demands for Grants was passed in Lok Sabha.
The FM told Parliament that there will be no shortage of fertiliser supply for farmers and that the government was taking steps keeping the upcoming rabi crop in mind. She said the government was ramping up the supply of urea through increased domestic production as well.
The ministry sought the approval of Parliament for a gross additional expenditure of Rs 2,81,289.26 crore involving a net cash outgo of Rs 2,01,142.96 crore through the second Supplementary Demand for Grants for FY2025-26.
Sitharaman said, “There is no increase in expenditure beyond the BE of 2025-26 due to the second supplementary.”
In the Revised Estimate for 2025-26, the fiscal deficit has been estimated at 4.4 per cent of GDP, which is the same as the budget estimate.
The finance minister also highlighted that the Jal Jeevan Scheme, which will run till December 2028, would receive Rs 8.69 lakh crore, of which the share of the central government would stand at Rs 3.59 lakh crore.
[The Business Standard]
