Finance Minister Sitharaman Proposes Economic Stabilisation Fund to Tackle Global Headwinds
India proposes Rs 57,300-crore fund to buffer economy against global shocks and ensure fertiliser subsidies.
India has proposed an “economic stabilisation fund” aimed at providing fiscal flexibility to address global economic headwinds and unexpected shocks, Finance Minister Nirmala Sitharaman told parliament on Friday. The fund is proposed at Rs 57,300 crore (approximately $6.2 billion) and is intended to give the government room to respond to unforeseen supply chain disruptions and other economic challenges.
The announcement comes amid broader fiscal measures this week, when the government sought parliamentary approval for gross additional spending of Rs 2.81 lakh crore. Sitharaman clarified that this move does not increase overall expenditure beyond the budgeted projections, with a portion of the additional spending to be offset by savings and higher receipts from ministries and departments.
Sitharaman also proposed an additional Rs 19,230 crore in fertiliser subsidies to meet increased requirements under the nutrient-based subsidy policy and urea subsidy payments. This comes as the country faces rising import costs for crop nutrients such as urea and ammonia following disruptions in supply routes through the Strait of Hormuz, caused by the ongoing conflict in Iran.
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The Finance Minister emphasised that the proposed economic stabilisation fund would help the government react swiftly to global shocks while ensuring that essential domestic spending is not affected. She reassured lawmakers that funds for critical sectors, including agriculture, would remain adequate and uninterrupted.
India’s fertiliser subsidy bill has been under pressure due to rising international prices. The stabilisation fund and additional allocations are expected to safeguard farmers from sudden cost escalations and maintain the government’s ability to support the agricultural sector.
Sitharaman highlighted that the economic stabilisation fund reflects a proactive approach to fiscal management, providing a buffer against unforeseen circumstances while maintaining the government’s commitment to fiscal discipline. She noted that the measures aim to preserve economic stability amid global uncertainty and rising input costs for key sectors.
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