New Delhi: The Indian government is seeking parliamentary approval for a net additional expenditure of ₹41,455 crore (approximately $5 billion USD) for the fiscal year 2025-26. Finance Minister Nirmala Sitharaman presented the proposal in the Lok Sabha on Monday, December 1, 2025, as part of the first batch of Supplementary Demands for Grants.
The additional spending includes allocations for key sectors, with a significant portion earmarked for fertiliser subsidies, amounting to over ₹18,000 crore. Approximately ₹9,500 crore has been requested for oil marketing companies. The proposal seeks approval for gross additional expenditure of ₹1.32 lakh crore, which includes savings of ₹90,812 crore from various Ministries and Departments. Therefore, the net cash outgo would be ₹41,455.39 crore.
The supplementary demands coincide with the commencement of the Winter Session of Parliament, which is scheduled to run from December 1 to 19. The session will address a heavy economic agenda, including nine key bills ranging from insurance reforms to new taxation frameworks.
A major focus of the session is the Insurance Laws (Amendment) Bill, 2025, which proposes to increase the foreign direct investment (FDI) cap in the insurance sector from 74% to 100%. The government views this as a move to modernize financial-sector regulation. The insurance sector has already attracted ₹82,000 crore in FDI.
The Finance Minister is also set to introduce the Central Excise (Amendment) Bill, 2025, and the Health Security and National Security Cess Bill, 2025, in the Lok Sabha. These bills aim to reshape the taxation of tobacco and pan masala. The proposed measures would replace the Goods and Services Tax (GST) compensation cess with an excise duty on tobacco products. The Health Security cess would be levied on the machines or processes used to manufacture specified goods, with the proceeds earmarked for national security and public health expenditure. Currently, tobacco and pan masala attract 28% GST plus varying compensation cess rates.
Another significant reform on the agenda is the Securities Markets Code Bill, 2025, which proposes consolidating three separate laws governing India's capital markets into a single unified code to streamline compliance and improve ease of doing business. The session is also expected to see progress on the Jan Vishwas (Amendment of Provisions) Bill, 2025, which aims to decriminalize a wide range of minor offenses and reduce regulatory friction for companies.
In related news, earlier reports indicated that the government is likely to increase the defence capital budget by approximately ₹45,000 crore in FY26 to fund significant military projects and expedite the procurement of advanced military equipment. This additional allocation is expected to be channelled through supplementary demands for grants during the Winter Session. Domestic procurement is projected to surpass ₹1.12 lakh crore in FY26.
The push for increased spending and legislative reforms aligns with India's broader economic objectives, including infrastructure development, enhanced social welfare programs, and modernization of key sectors. The government has emphasized its commitment to meet strategic and operational needs, with a particular focus on domestic manufacturing under the Atmanirbhar Bharat initiative.
