India’s economy ‘in a position of strength’; domestic LPG output up by 25% to offset import risks, FM Sitharaman says

India is well-positioned to withstand global shocks, Finance Minister Nirmala Sitharaman said on Tuesday, as she reassured Parliament on uninterrupted LPG supplies amid West Asia tensions and detailed fresh allocations, including funds for fertilisers, MSMEs and pending MGNREGA dues, under the government’s supplementary spending plan.

Detailing the Supplementary Demands for Grants, Sitharaman said the ₹30,000 crore provision will be used to settle pending liabilities under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), addressing concerns raised by states over delayed payments. She added that the scheme will receive its full ₹95,000 crore allocation from April 1 as announced in the Union Budget.

Among other key allocations, the government has provided ₹19,230 crore in advance for fertiliser procurement to prepare for the upcoming Rabi season, noting that global tendering begins months ahead. An additional ₹5,000 crore has been earmarked as central assistance for Jammu and Kashmir.


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To address credit constraints faced by small businesses, ₹3,000 crore has been routed through Small Industries Development Bank of India (SIDBI) to support MSMEs.

LPG concerns amid Strait of Hormuz dependence

Responding to opposition concerns over a potential LPG shortage due to the Middle East crisis, Sitharaman said India is taking multiple steps to ensure uninterrupted supply.

“Nearly 65% of our LPG is imported, and a large share of that comes through the Strait of Hormuz,” she said, acknowledging the risks posed by geopolitical tensions.

However, she emphasised that the government has ramped up domestic production by about 25% by diverting propane and butane streams towards LPG output. “We are not only ensuring steady imports but also strengthening domestic capacity so households do not suffer,” she said.

Energy transition milestone

The Finance Minister highlighted a major shift in India’s energy mix, stating that non-fossil fuel capacity has, for the first time, exceeded fossil fuel-based capacity.

As of January 2026, India’s installed power capacity stands at 520.5 GW, of which over 52% comes from non-fossil sources. She noted that renewable expansion has accelerated sharply, with record additions in 2025.

Citing global rankings, Sitharaman said India is among the top countries in solar and wind energy capacity, while the cost of solar power has fallen sharply over the past decade.

Framing her remarks around macroeconomic stability, Sitharaman said India has navigated successive global disruptions, from the Covid-19 pandemic and supply chain breakdowns to the Russia-Ukraine war, inflation spikes, and trade conflicts, without severe domestic shocks.

“The strength of the Indian economy enables us to deal with unforeseen challenges,” she said, adding that capital expenditure has increased 4.2 times from ₹2.63 lakh crore in 2017-18 to ₹12.2 lakh crore in 2026-27, driving growth through multiplier effects.

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Attack on UPA-era fiscal practices

The Finance Minister also used the debate to criticise the previous UPA government’s fiscal management, particularly the use of off-budget borrowings such as oil bonds.

She said oil bonds worth ₹1.48 lakh crore issued between 2004-05 and 2009-10 understated the fiscal deficit at the time. “If these borrowings had been reflected in the budget, the deficit numbers would have been significantly higher,” she argued.

Sitharaman added that the current government has now fully repaid oil bond liabilities amounting to ₹2.92 lakh crore, including interest.

Fiscal consolidation and banking sector cleanup

Highlighting fiscal discipline, she said the government has reduced the fiscal deficit from over 9% during the pandemic to 4.4% within five years.

She also pointed to the ₹2.8 lakh crore spent on recapitalising public sector banks after 2014, describing it as a necessary step to repair a “fragile” banking system inherited by the current administration.

Moreover, Sitharaman said India’s economic framework, built on transparency, capital investment and self-reliance, has created the capacity to respond to crises, including current geopolitical uncertainties.

“We have not only managed our economy but also cleared past liabilities. Today, we stand in a position of strength,” she told the House.