Govt seeks Parliament nod for ₹41k crore additional spending in FY26

First supplementary demands for grants tabled in Parliament focus on fertiliser and petroleum subsidies amid rising costs

Union Finance Minister Nirmala Sitharaman on Monday sought the Parliament’s nod for net additional spending of ₹41,455 crore for 2025-26 (FY26), which includes ₹28,000 crore for fertiliser and petroleum subsidies. 

While the first supplementary demands for grants tabled in the Lok Sabha seek approval for a gross additional expenditure of ₹1.32 trillion, spending of ₹90,812 crore will be matched by the savings of ministries and departments. 

Aditi Nayar, chief economist at Icra, said the net cash outgo under the first supplementary demands for grants is relatively moderate, and could be financed through savings found under other heads. “While we believe that taxes will fall short of the FY26 BE (budgetary estimates), higher-than-budgeted non-tax revenues would absorb a part of this shortfall.  Overall, we do not expect a material fiscal slippage at the current juncture,” she added. 

India’s expenditure on fertiliser subsidies in the first half of FY26 (H1FY26) was ₹1.07 trillion, exceeding the ₹89,460.56 crore it spent in the same period last year. This is because the country imported huge quantities of urea. The FY26 budgeted fertiliser subsidy for both urea and non urea fertilisers is around ₹1.68 trillion. Experts projected that the overall fertiliser subsidy could exceed ₹1.9 trillion, due to international prices of urea, finished DAP and NPKS being higher than last year. 

“I would imagine it (fertiliser subsidy) should go up another 15-odd per cent. That’s my personal guess. This would be due to higher prices of urea and DAP in the middle of the year. I would imagine a 15 per cent increase in the subsidy bill should be there,” said Sanjiv Kanwar, managing director, Yara South Asia. 

In October, the Union cabinet raised the subsidies on phosphorus and sulphur fertilisers for the ongoing 2025-26 rabi season, with an allocation of ₹37,952 crore to cover the rising import costs for manufacturers and to provide relief to the farming community.  The rates became effective on October 1, and will continue till March 31, 2026. 

Sitharaman also sought additional spending of ₹1,304 crore for the Department of Higher Education, and ₹225 crore for the commerce ministry. 

Additionally, approval has been sought for additional spending of around ₹1,200 crore by the Ministry of External Affairs, and ₹2,500 crore by the home ministry.