The Centre on Tuesday tabled the second batch of Supplementary Demands for Grants for FY26, seeking Parliament’s approval for gross additional expenditure of ₹2.81 lakh crore.
The proposals were presented in the Lok Sabha by Finance Minister Nirmala Sitharaman.
Supplementary demands are needed when the original budget for the current financial year falls short of actual expenditure, or when new, unforeseen expenses arise.
2 March 2026
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“Approval of Parliament is sought to authorise gross additional expenditure of ₹2,81,289.26 crore. Of this, the proposals involving net cash outgo aggregate to ₹2,01,142.96 crore, and gross additional expenditure matched by savings of the ministries or departments or by enhanced receipts and recoveries aggregates to ₹80,145.71 crore,” the government said in the document.
A significant portion of the additional net cash outgo is aimed at higher spending on fertiliser and food subsidies, for which the government is seeking ₹15,000 crore and ₹23,640 crore, respectively. The move comes amid concerns over supply disruptions and price volatility in key fertiliser inputs such as urea and di-ammonium phosphate (DAP) following tensions in West Asia.
Economists say the additional spending is unlikely to significantly disrupt fiscal targets. “Although the net cash outgo under the second supplementary demand for grants has been pegged at a sizable ₹2.0 lakh crore, this is likely to be offset to a large extent by expenditure savings across ministries,” said Aditi Nayar, Chief Economist and Head – Research & Outreach at ICRA.
She noted that the Centre’s revenue expenditure would need to expand by around 30% year-on-year during February–March 2026 to meet the revised estimates for FY26, implying an incremental outlay of roughly ₹2.3 lakh crore. “Consequently, we do not expect a material fiscal slippage on this account,” she added.
The government has also sought ₹59,000 crore for the Economic Stabilisation Fund, a reserve created in FY26 to absorb unforeseen expenditure arising from volatile global conditions. Additionally, about ₹30,000 crore has been earmarked for transfers to states, while ₹26,237 crore has been requested to cover revenue expenditure by the defence ministry.
The government sought the first batch of Supplementary Demands for Grants with gross additional expenditure of ₹1.32 lakh crore in December. It was tabled for spending ₹18,525 crore on fertiliser and related subsidies, and nearly ₹9,500 crore by the Petroleum Ministry to compensate oil marketing companies for under-recoveries.
[With inputs from PTI]
