₹1 Lakh Crore ‘Economic Stabilization Fund’ – Approved by the Lok Sabha

Introduction

Global political and economic crises can affect the economic stability of countries. In particular, wars, supply chain disruptions, and energy crises can have a major impact on the economy. To address such unexpected situations, the Central Government has proposed the creation of a ₹1 lakh crore ‘Economic Stabilisation Fund’. This proposal has now received approval from the Lok Sabha.

1. Objective of the Economic Stabilisation Fund

The main objective of this fund is to protect the Indian economy during global wars, geopolitical tensions, supply chain disruptions, energy crises, and sudden economic shocks. Recently, due to the war in the West Asian region, risks such as increase in oil prices, energy security concerns, and disruption in international trade have emerged. In such circumstances, the Economic Stabilisation Fund becomes highly significant.

2. Supplementary Demands for Grants

This allocation has been proposed through the second batch of Supplementary Demands for Grants in the current financial year. The total additional expenditure amounts to ₹2.81 lakh crore. Out of this, ₹2.01 lakh crore will be additional cash expenditure, while ₹80,000 crore will be adjusted through additional revenue. As part of this expenditure, ₹1 lakh crore will be allocated to establish the Economic Stabilisation Fund.

3. Other Major Expenditures

The supplementary demands also include additional funds for Fertilizer Subsidy and Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY). These are important social welfare schemes aimed at supporting the public.

4. Fiscal Deficit

According to the Union Finance Minister, the fiscal deficit for the current financial year will be maintained at around 4.4% of GDP. This will help maintain fiscal discipline in government finances.

5. Parliamentary Procedure

Supplementary Demands for Grants are presented in the Lok Sabha. They are then discussed in the House. After discussion, they may be approved through a voice vote. In this context, the Lok Sabha has approved the proposal for the ₹1 lakh crore Economic Stabilisation Fund.

Static Link (Indian Economy / Parliament)

Supplementary Demands for Grants refer to the procedure through which Parliament approves additional expenditure not included in the original budget. This topic is important in Public Financial Management and Indian Economy. It is also included in the TNPSC syllabus under Indian Economy and Financial Administration.

Conclusion / Way Forward

Global political and economic changes can significantly impact the Indian economy. In such situations, establishing an Economic Stabilisation Fund as a precautionary measure is an important step. This will help manage future economic shocks and ensure the financial stability of the country.