Economic Stabilisation Fund to help govt respond to global challenges: Sitharaman

New Delhi: Finance Minister Nirmala Sitharaman on Friday said the Rs 1 lakh crore Economic Stabilisation Fund will give fiscal headroom to allow India to respond to global headwinds.

Replying to the debate on the second batch of supplementary demands for grants in the Lok Sabha, she said the fund will act as a buffer to absorb shocks arising due to unforeseen global challenges like the current one in West Asia.

"The Rs 1 lakh crore Economic Stabilisation Fund will give fiscal headroom to allow India to respond to global headwinds," she said.

Through the second batch of supplementary demands, the government sought Lok Sabha approval for spending a gross Rs 2.81 lakh crore extra in the current fiscal year. With additional receipts of Rs 80,000 crore budgeted for the current fiscal year, the net additional cash spending will be Rs 2.01 lakh crore.

Sitharaman said the fiscal deficit for the current financial year (2025-26) will be within the Revised Estimates (RE).

In RE 2025-26, the fiscal deficit has been estimated at par with Budget Estimates of 2025-26 at 4.4 per cent of GDP.

"There is no increase in expenditure beyond the BE of 2025-26 due to the second supplementary," Sitharaman said, amid continuous sloganeering by Opposition members over LPG shortage concerns.

In the Revised Estimates for the current fiscal year, the government had cut total expenditure to Rs 49.65 lakh crore, from Rs 50.65 lakh crore in BE.

Till January, the government had spent Rs 36.90 lakh crore, according to Controller General of Accounts (CGA) data.

The supplementary demands for grants include grants spending towards setting up of an Economic Stabilisation Fund of Rs 1 lakh crore. Also, Parliament's nod has been sought for an extra spending of Rs 19,230 crore towards fertilisers' subsidy and Rs 23,641 crore for subsidies under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY). Other major expenditure heads include Rs 41,822 crore for the defence ministry.

Sitharaman said there will be no shortage of fertilisers for farmers and adequate provision has been made in the supplementary demands for grants.