AI takes centre stage in Budget 2026 as Finance Minister pitches ‘Make AI work for India’

Union Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27 on Sunday where she mentioned artificial intelligence 11 times in the Parliament. She stressed how technology became a key driver of economic growth and announced significant allocations and initiatives targeted at the information technology and AI sectors. 

She emphasised the approach to “Make in India and Make AI work for India.” Several proposals aimed at creating a robust AI ecosystem while addressing jobs related to skill and infrastructure. 

Rare-earth corridors

She announced the creation of dedicated rare earth corridors across four mineral-rich states, Odisha, Kerala, Andhra Pradesh and Tamil Nadu. The Finance Minister also signified a boost to the semiconductor sector in India. 

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A total R&D fund of ₹1 trillion has been spread over six years, out of which ₹20,000 crore has already been deployed.

This year’s budget saw the highest number of mentions of AI to date, with highest focus across governance, agriculture, healthcare, and education. 

IndiaAI Mission

The budget will continue supporting the IndiaAI Mission with an allocation of ₹2,000 crore, alongside the National Quantum Mission with ₹6,003 crore.

These initiatives, along with the Anusandhan National Research Fund, aim to promote AI adoption, research and development, and commercialisation in priority areas such as quantum computing, biotechnology, the digital economy and deep technologies.

A higher-powered Education to Employment and Enterprises Standing Committee to focus on educational, employment outcomes and assess the impact of emerging technologies, including artificial intelligence, on jobs and skill requirements.

She said the committee will recommend measures with a special focus on the services sector as a core driver of economic growth.