New Delhi, India — March 13, 2026
Amid rising geopolitical uncertainty in West Asia and global economic volatility, India has announced a major financial safeguard to protect its economy. Union Finance Minister Nirmala Sitharaman said the government has created a ₹1 lakh crore Economic Stabilization Fund to help the country manage economic shocks triggered by global developments.
Speaking in the Lok Sabha during a discussion on supplementary demands for grants, Sitharaman stated that the fund would provide the government with additional financial capacity to respond quickly to sudden global challenges.
Economic Stabilization Fund to Cushion Global Risks
According to the finance minister, the ₹1 lakh crore Economic Stabilization Fund will serve as a financial buffer to mitigate the impact of global disruptions, including geopolitical tensions in regions such as West Asia.
She emphasized that the fund will strengthen India’s ability to handle economic shocks arising from global uncertainties while maintaining fiscal stability.
“The Economic Stabilization Fund will provide fiscal space to address challenges emerging from global developments,” Sitharaman said while responding to lawmakers.
Government Seeks Approval for Additional Spending
The government has also sought parliamentary approval to increase spending by ₹2.81 lakh crore in the current fiscal year.
However, Sitharaman noted that the government expects additional revenue of about ₹80,000 crore, which will offset part of the proposed expenditure. After adjusting for the expected income, the actual additional spending requirement would be about ₹2.01 lakh crore, she explained.
Fiscal Deficit Expected to Stay Within Target
The finance minister said the fiscal deficit for the financial year 2025–26 is expected to remain within the revised estimate target.
According to government projections, the fiscal deficit is estimated at 4.4 percent of Gross Domestic Product (GDP), which is in line with the target outlined in the budget for the year.
Revised Government Spending Figures
Under the revised estimates for the current fiscal year, the government reduced its total expenditure projection from ₹50.65 lakh crore to ₹49.65 lakh crore.
Data from the Controller General of Accounts shows that the government had already spent ₹36.90 lakh crore by January of the fiscal year.
Key Additional Spending Proposals
As part of the supplementary demands for grants, the government has proposed several key allocations, including:
₹1 lakh crore for the Economic Stabilization Fund
₹19,230 crore for fertilizer subsidies
₹23,641 crore for the Pradhan Mantri Garib Kalyan Anna Yojana
₹41,822 crore additional spending for the Ministry of Defence
Sitharaman also reassured lawmakers that there would be no shortage of fertilizers for farmers, noting that sufficient budgetary provisions have been made under the supplementary grant proposals.
Political Tensions During Debate
During the parliamentary debate, opposition members raised concerns over the availability of LPG cylinders and continued chanting slogans in the House. Despite the interruptions, the finance minister completed her response to the discussion on supplementary demands.
With global economic uncertainty and geopolitical tensions affecting markets worldwide, the government’s move to establish a dedicated stabilization fund is aimed at strengthening India’s ability to respond to future economic disruptions.
