Stabilisation fund doubled to ₹1L cr

Govt increases buffer as West Asia conflict continues

- 

THE CENTRE ON Tuesday sought Parliament's nod to create a ₹1-lakh-crore Economic Stabilisation Fund (ESF) as part of the second supplementary demand for grants for gross additional spending of ₹2.81 lakh crore in FY26.

For the ESF, the Centre initially provided a ₹50,000-crore outlay in the revised estimate for FY26 on February 1.

The allocation for the contingency buffer has doubled in the wake of the West Asia conflict. Besides revenue shocks, the ongoing crisis could inflate subsidies on fertilisers and cooking gas next year if the war between the US-Israel alliance and Iran continues for months.

A stabilisation fund is a reserve fund set aside by governments to maintain fiscal stability and reduce the impact of sudden economic shocks.