Budget 2026: Skilling, education and job creation at centre of growth plan

With a sharp rise in skilling and labour allocations, Budget 2026-27 focuses on aligning education with industry needs, boosting services-led employment, and preparing youth for emerging roles in the

Skilling India’s youth and upgrading the education sector to meet industry needs for a job creation push held importance in the Yuva Shakti-driven Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman on Sunday.

 

The government, Sitharaman announced, will facilitate professional institutions such as Institute of Chartered Accountants of India (ICAI), Institute of Company Secretaries of India (ICSI), and Institute of Cost and Management Accountants of India (ICMAI) to design short-term, modular courses and practical tools to develop a cadre of “Corporate Mitras”, especially in Tier-II and Tier-III towns, who will assist MSMEs (micro, small, and medium enterprises) in meeting compliance needs. 

 

With a special focus on learning and job creation in the services sector, the government will set up a high-powered “Education to Employment and Enterprise” standing committee to recommend measures, identify high-growth sub-sectors, address policy and regulatory gaps, and explore services export opportunities. 

“The committee will prioritise areas to optimise the potential for growth, employment and exports. The panel will also assess the impact of emerging technologies, including artificial intelligence (AI), on jobs and skill requirements, and propose measures thereof,” Sitharaman said.

 

“The creation of this committee presents an excellent opportunity to identify and prioritise critical areas that can optimise growth, enhance employment opportunities, and boost exports. By focusing on skill development and aligning educational outcomes with industry needs, we can ensure that our workforce is well-prepared to meet the challenges and demands of the modern economy,” said Suchita Dutta, executive director of Indian Staffing Federation (ISF). 

 

In another initiative, to promote employability in the new economy, Sitharaman proposed to support the Indian Institute of Creative Technologies in Mumbai to create animation, visual effects, gaming and comics (AVGC) content creator labs in 15,000 secondary schools and 500 colleges.

 

Additionally, a new National Institution of Design will be created to boost design education and development in the eastern region of India. Also, five university townships will be set up near major industrial and logistics corridors, which will host multiple universities, colleges, research institutions, skill centres, and residential complexes.

 

“These planned academic zones will host multiple universities, colleges, research institutions, skill centres, and residential complexes,” said Sitharaman.

 

“As hiring momentum builds across infrastructure, manufacturing, services, and emerging technologies, employability will increasingly be defined by role-based skills and the ability to continuously reskill. Aligning academic curricula with industry requirements can significantly reduce the education to employment gap and enable young professionals to enter the workforce job-ready, lowering the need for extensive post-hire training,” said Aditya Narayan Mishra, managing director and chief executive officer (MD&CEO) of CIEL HR.

 

The Ministry of Skill Development and Entrepreneurship (MSDE) received an allocation of ₹9,886 crore, a 62 per cent jump from ₹6,100 crore in the previous budget. 

 

Sitharaman also announced a pilot scheme for upskilling 10,000 guides in 20 iconic tourist sites through a standardised, high-quality 12-week training course in hybrid mode, in collaboration with an Indian Institute of Management (IIM).

 

“The strong focus on demand-linked training, sector-specific skilling, and alignment with national qualification frameworks will be critical in ensuring quality, mobility, and employability at scale. This integrated approach provides a strong foundation to support inclusive growth, enterprise expansion, and India’s long-term competitiveness,” said Veenu Jaichand, partner-skill and employability, government and public sector, EY India.

 

Additionally, she announced the creation of a National Destination Digital Knowledge Grid to digitally document all places of cultural, spiritual, and historical significance. “This initiative will create a new ecosystem of jobs for local researchers, historians, content creators, and technology partners,” she added.

 

“With initiatives like AHP (allied health professionals) institutions, multi-skilled caregiver training, medical tourism hubs, and a National Institute of Hospitality, India is building the workforce backbone the world increasingly needs. This positions India strongly to meet both domestic demand and global talent requirements in care and services. This is a decisive shift towards investing in vocational and applied skills. By scaling care, health, and hospitality talent, India is positioning itself as a reliable workforce partner for the world’s growing service and care needs,” said Mayank Kumar, CEO and cofounder of BorderPlus.

 

Highlighting the role of the sports sector in employment generation, Sitharaman announced the launch of a new, revitalised Khelo India Mission to transform sports over the next decade. This initiative will be supported by training centres, training of coaches and support staff, and development of sports infrastructure.

 

The Ministry of Labour and Employment received a record allocation of ₹32,666 crore, up from an allotment of ₹32,646 crore in the 2025-26 Budget. Notably, only about 39 per cent of this was utilised as the Revised Estimate for the ministry amounted to ₹12688.05 crore. The ministry also received its first allocation for its flagship employment scheme Pradhan Mantri Viksit Bharat Rozgar Yojana (PM-VBRY), announced in August 2025, at ₹20,083 crore.