Budget 2026: AI and cutting-edge technologies can act as growth multipliers, says Finance Minister

Finance Minister Nirmala Sitharaman on February 1 underscored the role of artificial intelligence and other cutting-edge technologies as key growth multipliers while presenting the Union Budget 2026. The Budget signals a push towards future-facing sectors even as it flags rising pressures on resources such as energy and water.

Cutting-edge technologies, including artificial intelligence, can serve as growth multipliers for the Indian economy, Finance Minister Nirmala Sitharaman said on February 1 while presenting the Union Budget 2026.

Presenting her ninth consecutive Budget, Sitharaman said advanced technologies were enhancing production capabilities across sectors but were also sharply increasing demand for critical resources such as water and energy, underlining the need to manage emerging constraints alongside innovation-led growth.

The emphasis on technology-led expansion follows observations made in the Economic Survey 2025–26, tabled on January 30, which stated that India’s AI moment would not be determined by who builds the largest models but by who manages constraints more effectively. According to the Survey, these constraints include access to computing power, availability of electricity, skilled talent, job creation and capital, with the AI chapter linking these challenges to broader and often disconnected policy debates.

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The Union Budget 2026 further places emphasis on cutting-edge sectors such as semiconductors, rare earth minerals and biopharma, signalling the government’s intent to strengthen India’s position in strategic and future-facing industries. In addition, the Budget outlines measures for setting up mega textile parks and extending support to micro, small and medium enterprises, reinforcing manufacturing and employment generation alongside technology-driven growth.