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

Why in news

Finance Minister Nirmala Sitharaman announced the creation of a ₹1 lakh crore Economic Stabilisation Fund to provide fiscal headroom for India to respond to global challenges.

Background

The ₹1 lakh crore Economic Stabilisation Fund was approved through supplementary demands for grants in the Lok Sabha. It aims to absorb shocks from unforeseen events, specifically citing the current situation in West Asia.

Facts for Prelims

• FactEconomic Stabilisation Fund size: ₹1 lakh crore
• BodyThe fund was approved through supplementary demands for grants in the Lok Sabha
• FactFiscal deficit for FY 2025-26 will remain within the Revised Estimates

For Mains

Q. Discuss the significance of fiscal buffers like the Economic Stabilisation Fund in maintaining macroeconomic stability amidst global geopolitical shocks.

Dimensions to cover in your answer

• Fiscal headroom: Balancing immediate shock absorption with long-term fiscal deficit targets
• Counter-cyclical spending: Using targeted funds to mitigate external shocks on domestic economic stability

Keywords: fiscal headroom · counter-cyclical · macroeconomic stability · supplementary demands for grants · fiscal deficit

More Economy notes

• HRA exemption rises to 50% for salaried employees in Hyderabad under new IT rules · 20 March 2026
• Rupee weakness likely to persist as oil prices stay elevated: Anindya Banerjee · 20 March 2026
• Rs 1 lakh crore wiped off! Bajaj Finance shares tumble 18% in March so far amid raging Iran-US war · 20 March 2026
• The global winners and losers of the war in Iran · 20 March 2026
• Telangana Budget 2026-27 LIVE: Cabinet meeting begins · 20 March 2026
• RBI's March-end rupee support faces test from war and oil surge this year · 20 March 2026

All Economy current affairs →