On March 13, 2026, during the second part of the Budget session of Parliament, Indian Finance Minister Nirmala Sitharaman presented the “Economic Stabilization Fund” with Indian Rupees (₹) to give the country more room in its budget to deal with global problems. The Honorable Finance Minister of India said that the Economic Stabilization Fund would be set up with Rs. 1 trillion. She proposed that the fund start with ₹ 57,381 crores and add more money as needed.

The rise in crude oil prices in global market means that India needs spending an extra $8 billion (₹ 73,000 crores) every month. This extra spending makes inflation rise in a strange way. A stabilization fund is essential to keep prices stable by making small changes to surpluses and deficits from time to time. There are already a few price stabilization funds in India’s agriculture industry. The present mention is about dealing with global challenges, but the main point is oil prices. India should have enough funds to satisfy the need and volume, not just to protect against changes in oil prices.

Looking back to history, the Kuwait Investment Authority (KIA) was the first of its kind to be set up in 1953. The term “Sovereign Wealth Fund” SWF was first used in 2005. There are 150 SWFs in 60 countries right now, but only approximately 100 of them are worth talking about. They manage a total of $15 trillion in assets.

SWFs put money into secure investments and then give it back to people when expenses go up because of sudden change in situation like geopolitical tensions, wars, or a lack of oil, food, medicine, chemicals, technology, and other things. SWFs take on the shock of fiscal problems and lower the amount of trouble.

Norges Bank Investment Management in Norway is the world’s largest SWF, with assets under management (AUM) of up to $2 trillion. China Investment Corporation comes in second with $1.6 trillion. Safe Investment of China comes next with $1.5 trillion, followed by the Abu Dhabi Investment Authority (ADIA) with $1.2 trillion, and Saudi Arabia’s Public Investment Fund (PIF) with $1 trillion. Chinese SWFs handle over $2.7 trillion, whereas Singapore SWFs manage about $1.7 trillion. There are only a few minor SWFs in the US, and there has never been a national SWF. The UK also doesn’t have an SWF.

More and more SWFs are being generated these days. Danantara in Indonesia was started in 2025 with $900 billion, of which $20 billion had already been invested. Abu Dhabi started L’imad in 2026, making it the fourth SWF in the country after ADIA, ADQ, and Mubadala. In the same way, roughly 11 additional SWFs were set up in 2025, most of which were tied to emerging markets.

SWFs have helped with a number of problems in the past. Covid-19 was an important event that happened recently. Countries took money out of SWFs to deal with the crisis. Norway’s SWF and Singapore’s SWF both took out $37 billion during the Covid pandemic. During the oil crisis from 2015 to 2016, Saudi Arabia took out $70 billion and Russia took out $90 billion to make up for a lack of finances.

SWFs put 30% to 50% of their money into stocks, 10% to 30% into bonds or cash, and 20% to 30% into real estate or energy assets. SWFs invest all across the world to spread out their risk, keep their money safe, and make it easy to get. They use co-investments, joint ventures, and horizon-linked assets as part of their investment strategies. For the previous 20 years, SWFs have mostly put their money into real estate since it gives them steady income, even though it comes with the danger of losing money quickly.

India has been talking about SWF since 2014. The goal was to manage the country’s foreign exchange reserves, extra money, insurance money, and pension funds by investing in worldwide sources and getting higher returns through diversification. The National Investment and Infrastructure Fund (NIIF) was set up in 2015 and is a quasi-SWF that can only invest in India.

India has $700 billion in foreign exchange reserves, yet its current account deficit is between 1% and 1.3% of its gross domestic product (GDP). So, India needs more than one SWF to keep prices stable and build wealth over the long term. One is for keeping oil prices stable, which is something that needs to be done all the time. The other SWFs are for growing the country’s long-term wealth and using foreign exchange reserves to assist infrastructure.

India may need SWFs of $140 billion (₹ 12,75,000 crs), which is 20% of its foreign exchange reserves. This can be split up between keeping prices stable and making money. So, the suggested volume of ₹ 100,000 crs should be much bigger. The Funds should also make sure that management is effective.

SWFs have done a good job of creating safety nets and fiscal backstops for their economies. But there are also a few bad apples. In 2015, Malaysia’s IMDB lost $4.5 billion through offshore shells and the purchase of luxury goods. Zambia’s FSDEA lost a lot of money between 2017 and 2019 because money was moved to offshore loans.

India’s SWFs should have goals that let them invest money around the world in a greater range of ways. The SWFs should be able to work on their own without anyone else getting in the way. India might learn from the SWFs of Norway and Singapore, which are known for being open, efficient, and getting better returns.

References:

• 1. The Reuters
• 2. The Hindu