In a move to harness the potential of Artificial Intelligence (AI) while mitigating its possible disruptions, the government announced in Budget 2026 the formation of a high-powered panel to assess the impact of AI on the services sector. Finance Minister Nirmala Sitharaman, during her budget speech on February 1st, emphasized the strategic importance of this initiative, aimed at positioning India as a global leader in services.
The committee's primary objective is to evaluate how AI and other emerging technologies are reshaping employment patterns across key service industries, including IT, finance, tourism, healthcare, and logistics. This assessment will be crucial in understanding the evolving skill requirements and job displacement risks associated with the increasing adoption of AI-driven solutions. The panel will recommend measures to ensure that the services sector remains a core driver of "Viksit Bharat," with a target of securing a 10% share of the global services market by 2047.
The establishment of this high-powered committee follows several initiatives in the previous year's budget aimed at strengthening the AI ecosystem, including the creation of a Centre of Excellence on AI in education. The government has been actively working on various aspects of the AI landscape, such as developing AI models and enhancing computing accessibility for startups and researchers.
The Finance Minister highlighted AI's potential as a growth multiplier, emphasizing that these technologies improve production and increase demand for water and energy. This observation underscores the dual nature of technological advancements, where progress brings new challenges. The government aims to leverage AI for inclusive growth, particularly for farmers, women in STEM, youth, and first-time job seekers.
Budget 2026 also includes sector-specific skilling programs. Healthcare will see upgrades to allied health professional institutions, with the creation of new ones across the public and private sectors, covering 10 disciplines and adding one lakh professionals over five years. A parallel caregiver skilling plan aims to train 1.5 lakh workers in the coming year. Medical education capacity is being expanded with 10,000 additional seats this year, contributing to a longer-term target of 75,000 seats in five years.
Furthermore, the Budget supports the "orange economy," with initiatives for AVGC (Animation, Visual Effects, Gaming, and Comics) talent creation through content creator labs in 15,000 schools and 500 colleges, along with a proposed national institute of design for eastern India. Education infrastructure will expand through five university townships along industrial corridors and the establishment of one girls' hostel in every district via viability gap funding. Tourism, hospitality, and sports are also identified as key employment multipliers.
The government's focus on AI and the services sector aligns with the "Viksit Bharat" vision, which aims for inclusive growth through technological advancement. The high-powered committee represents a proactive approach to address the challenges and opportunities presented by AI, ensuring that India can harness its full potential while mitigating potential risks to employment and skills. This strategic move is part of a broader vision for India's future role in the global economy, with the services sector playing a pivotal role in achieving sustained and inclusive growth.
