Budget 2026: Nirmala Sitharaman announces high-powered panel to study AI’s impact on India’s services economy

Finance Minister Nirmala Sitharaman on February 1 announced the formation of a new high-powered committee to review the impact of emerging technologies such as artificial intelligence on India’s services sector, positioning services as a central driver of economic growth under the Union Budget 2026.

Presenting her ninth consecutive Budget in Parliament, Nirmala Sitharaman said the government will set up an Education to Employment and Enterprises Standing Committee to recommend measures aimed at creating a clear pathway for India’s youthful population while strengthening the services economy. She stated that the committee will focus on identifying priority areas to optimise growth potential across the services sector.

In her Budget 2026 speech, the Finance Minister said the government has chosen the path of reforms over rhetoric for the Union Budget 2026 and will continue to take steps towards the goal of a Viksit Bharat. She informed the House that the proposed committee will assess how technologies such as AI are reshaping services, employment and enterprise creation, and will suggest policy interventions accordingly.

The announcement comes amid expectations from India’s leading technology firms that the Budget would accelerate the development of the AI ecosystem, including support for innovation, digital infrastructure and wider adoption of AI across sectors, along with measures to improve liquidity in the market.

The Union Budget 2026 also outlined plans to create a new range of career skill pathways, aimed at better aligning education and training systems with evolving industry requirements and improving employability across sectors. Sitharaman stated that initiatives such as content creator labs in schools and colleges, along with the expansion of Ayurveda-related institutions, are expected to support job creation in both emerging and traditional sectors.

The move aligns with the Economic Survey tabled in Parliament on January 29, which described artificial intelligence as an economic strategy rather than a prestige technology race. The Survey argued for a bottom-up, multi-sector approach built on open and interoperable systems to encourage collaboration and shared innovation, according to the report.

Separately, the Finance Minister announced an increase of about 9 per cent in capital expenditure for the coming financial year, raising the allocation to Rs 12.2 lakh crore in the Union Budget 2026–27. Sitharaman’s ninth Budget brings her closer to former Prime Minister Morarji Desai’s record of presenting 10 Union Budgets.