New Delhi: New Delhi: At a time when the conflict in Middle East, resulting from the Iran-US war, is giving the world a testing time, the Indian government has decided to take a step that will act as a shock-absorber in the event of any such turmoil in the future.
Union Finance Minister Nirmala Sitharaman on Friday announced the creation of a Rs 1 lakh crore Economic Stabilisation Fund to provide fiscal flexibility during global economic shocks.
“The Rs 1 lakh crore Economic Stabilisation Fund will give fisca
l headroom to allow India to respond to global headwinds,” Sitharaman told the Lok Sabha during the Budget session of Parliament.
According to the government, the fund will serve as a buffer to absorb economic shocks arising from unexpected global developments, such as the current geopolitical tensions in the Gulf region.
Sitharaman said India’s fiscal deficit will remain at 4.4% of GDP in FY26, as was outlined in the Budget Estimates.
In the Revised Estimates for the current fiscal year, the Centre reduced its total expenditure to Rs 49.65 lakh crore, from Rs 50.65 lakh crore projected in the Budget Estimates.
As per data from the Controller General of Accounts, the Centre already spent Rs 36.90 lakh crore by the end of January in the current fiscal year.
The government has maintained its fiscal consolidation path despite global uncertainties and rising geopolitical tensions, the minister asserted.