Centre seeks Parliamentary approval for ₹1 lakh cr ‘Economic Stabilisation Fund’

The Union Ministry of Finance has recently sought Parliamentary approval to establish a ₹1 lakh crore Economic Stabilisation Fund to prepare the country for unforeseen economic shocks arising from the ongoing conflict in West Asia.

According to government sources, the fund is aimed at mitigating the impact of market volatility triggered by the war in West Asia and the Gulf region, which has been affecting global energy prices, supply chains and financial markets. The proposed fund will act as a financial buffer to stabilise the economy during periods of extreme uncertainty.

More than half of the required funds will come through fresh cash outgo, while the remaining amount will be mobilised through savings from various government departments.

The proposal has been included in the government’s second batch of Supplementary Demands for Grants (SDGs) for the financial year.

Key financial details include:

• Gross additional expenditure sought: Over ₹2.81 lakh crore.
• Net cash outgo: More than ₹2 lakh crore.
• Expenditure matched by savings or additional receipts: Over ₹80,000 crore, to be met through savings of ministries/departments or enhanced recoveries.

Source: BL