New Delhi: The government sought and obtained $57,381.84 lakh crore for the Economic Stabilization Fund as part of supplementary grants for 2025-26, with Union Finance Minister Nirmala Sitharaman telling the Lok Sabha on Friday that this would “provide significant fiscal space to allow India to respond to global headwinds”.
The minister added that the fund will allow the government to respond to unexpected supply chain disruptions and unexpected shocks to the Indian economy.
While the fund was not part of the original 2025-2026 budget, according to 2026-2027 budget documents submitted on February 1, it was mentioned as part of the revised estimate for 2025-2026, with $50,000 crores have been allocated for this. The stabilization fund is placed within the reserve funds of the Department of Economic Affairs, or DEA.
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Sitharaman said on Friday $Rs 2.01 lakh crore net supplementary demand for grants for 2025-26 will not change the fiscal deficit figures. The request was passed on Friday after discussion.
The Finance Minister has sought Parliament’s approval for the expenditure requirements relating to the 61 grants, involving a gross outlay of about Rs 2.81 lakh crore, and a net cash disbursement of $2.01 lakh crore. the
The Union Budget presented on February 1 this year stipulated India’s fiscal deficit at 4.4% of GDP in the revised estimate for 2025-26, and while continuing on the path of fiscal consolidation, 4.3% has been set as the fiscal deficit target for 2026-27.
Details on how the Economic Stabilization Fund will be used were not immediately available, although people familiar with the matter in the government said the money would be allocated to protect consumers from price shocks caused by the recent rise in energy prices due to the US-Israel war on Iran, and to make supply chains for vital goods more resilient.
