Why in the News
The Government of India has created an Economic Stabilisation Fund of ₹57,381 crore through the Second Supplementary Demand for Grants to manage economic shocks arising from global crises such as the West Asia conflict and rising oil prices.
Key Highlights
1. Supplementary Demand for Grants
- The Lok Sabha approved the Second Supplementary Demand for Grants.
- Gross additional expenditure: about ₹2.81 lakh crore.
- Estimated savings and receipts: around ₹80,000 crore.
- Net additional cash outgo: about ₹2.01 lakh crore.
2. Economic Stabilisation Fund
- Allocation: ₹57,381 crore.
- Purpose: Provide fiscal space to address global economic uncertainties, including
- Oil price shocks
- Supply chain disruptions
- External economic crises
- Sector-specific shocks.
- According to Nirmala Sitharaman, the fund will help the government respond quickly to unexpected global developments.
3. Context: Global Economic Pressures
- Rising crude oil prices (around $100 per barrel).
- Disruptions due to West Asia conflict affecting energy supply chains.
- Risk of broader global economic instability.
4. Fiscal Deficit Assurance
- The government reiterated that India’s fiscal deficit target for FY 2025–26 will remain at 4.4% of GDP, even after these additional expenditures.
Significance
- Acts as a buffer mechanism against external economic shocks.
- Enhances fiscal flexibility for emergency responses.
- Helps maintain macroeconomic stability without deviating from the fiscal consolidation roadmap.
| [2012] Which of the following are the methods of Parliamentary control over public finance in India? 1. Placing Annual Financial Statement before the Parliament. 2. Withdrawal of moneys from Consolidated Fund of India only after passing the Appropriation Bill. 3. Provisions of supplementary grants and vote-on-account. A periodic or at least a mid-year review of programmes of the Government against macroeconomic forecasts and expenditure by a Parliamentary Budget Office. Introducing Finance Bill in the Parliament. Select the correct answer using the code given below: (a) 1, 2, 3 and 5 only (b) 1, 2 and 4 only (c) 3, 4 and 5 only (d) 1, 2, 3, 4 and 5 |
