Budget 2026-27: Govt sets up panel to study AI impact on services sector

Union Budget 2026: The Centre plans a high-powered panel to assess how AI is changing services, employment and skills, while aiming to raise India's global share in services to 10% by 2047

Finance Minister Nirmala Sitharaman on Sunday announced the setting up of a new high-powered committee to study the impact of emerging technologies such as artificial intelligence (AI) on India’s services sector.

 

The committee will focus on strengthening the services sector as a key engine of economic growth and job creation.

 

Announcing the move during her Budget 2026 speech, FM Sitharaman said, "I propose to set up a high-powered Education to Employment and Enterprises Standing Committee to recommend measures that focus on the services sector as a core driver of economic growth."

 

She said that the panel will work towards positioning India as a global leader in services, with a target of securing a 10 per cent share in the global services market by 2047.

 

Highlighting the role of technology, the finance minister said, "21st century is technology driven. Adoption of technology is for the benefit of all people — farmers in the field, women in STEM, youth keen to upskill and Divyangjan to access newer opportunities."

 

Budget 2026: Govt support for AI, quantum and research missions

 

Sitharaman said that the government has already taken several steps to promote new technologies. These include the AI Mission, National Quantum Mission, Anusandhan National Research Fund, and the Research, Development and Innovation Fund.

 

These initiatives aim to build a strong ecosystem for innovation and future-ready skills.

 

She further proposed a tax holiday till 2047 for foreign companies offering cloud services globally using data centres located in India. The tax benefit will be available to eligible entities, subject to specific conditions.   

 

Bharat Vistar: AI tool for agriculture

 

Among other announcements, Sitharaman proposed a new AI-based agriculture platform. She announced the launch of Bharat Vistar (Virtually integrated system to access agricultural resources), a multilingual AI tool that will integrate the agri-stack portals and the Indian Council of Agricultural Research (ICAR) package on agricultural practices with AI systems.

 

The platform aims to improve access to farm-related information and support better decision-making for farmers.

 

The government also plans to set up a National Destination Digital Knowledge Grid to digitally document cultural, spiritual and heritage sites across the country. The initiative is expected to create new jobs for local researchers, historians, content creators and technology partners, while preserving India’s rich heritage in digital form.   

 

Economic Survey flags need for India-made AI solutions

 

The Economic Survey 2025-26 has stressed the need for India to build its own AI solutions rather than relying heavily on foreign companies. It said that artificial intelligence is still at an early stage globally, offering India a unique opportunity to shape its growth in a way that creates quality jobs and long-term value for its workforce.

 

The Survey pointed out that building advanced AI models requires strong computing power. However, rising demand for graphics processing units (GPUs), shortages of critical chips and storage, and high costs are major challenges.

 

It added that even when funding is available, expansion of data centres can be delayed due to limited hardware supply. Over time, access to GPUs is expected to remain the biggest bottleneck for AI growth, with global supply uncertainties slowing progress.

 

India, the Survey said, has several advantages too. It is among the top contributors to global AI research, has a large pool of skilled technical talent and is one of the most AI-aware workforces in the world. India also has access to rich domestic data from sectors such as health, agriculture, finance and public services, though this data potential remains underutilised.