Budgets are often judged by what they announce or what they withhold, yet budget 2026-27 signals a quieter and more consequential ambition by reflecting a shift from declaring intent to consolidating capacity.
This clarity is especially visible in its approach to information technology, where the focus lies in building the institutional and physical foundations required for long-term digital strength. Viewed as a whole rather than as a set of isolated measures, the budget reveals a sequential, policy-driven strategy unfolding over the past decade—beginning with digital access, progressing to capability and now maturing into sovereignty. Budget 2026-27 marks the moment when these strands decisively converge.
The first stage was the creation of digital citizenship at population scale. India has over 1.2 billion Aadhaar holders today, processes more than 11 billion UPI transactions each month, and operates digital public platforms that deliver welfare, identity verification and financial inclusion at a scale unmatched globally. As governance migrated to digital interfaces, data accumulated across payments, mobility, education, health care and commerce. This data was not generated as a byproduct of private enterprise alone, but as a consequence of state-enabled participation, transforming information into a form of national capital.
The second stage involved recognising that data is not neutral. In an economy increasingly shaped by artificial intelligence and predictive analytics, data derives its value from scale, diversity and continuity. India’s data reflects a population of continental scale, linguistic plurality and complex social behaviour. With nearly a billion internet users and one of the world’s fastest-growing digital economies, this data does more than support applications. It trains algorithms, refines AI models and shapes future digital markets—giving it strategic significance far beyond immediate commercial use.
Once that reality is acknowledged, the question of jurisdiction becomes unavoidable. Control over data is determined not by ownership alone, but by where it is stored, processed and governed. Data that permanently resides outside national borders falls under foreign legal regimes and strategic priorities. Even when intentions are benign, vulnerability is structural. A mature state addresses such exposure not through prohibition, but through capacity building. This budget advances that objective through economic architecture rather than regulatory compulsion.
The provision of a tax holiday until 2047 for foreign companies offering global cloud services using India-based data centre infrastructure is a long horizon signal intended to reshape digital geography. It aligns with India’s rapidly expanding data-centre ecosystem, which already supports an estimated 150 exabytes of digital storage and is projected to more than double by the end of the decade—positioning the country as a serious global hub for data storage and processing, rather than merely a destination market.
Equally significant is the budget’s refusal to confine information technology to software services alone. It treats IT as an ecosystem anchored in chips, electronics, storage and power. The continued emphasis on semiconductor capability through the India Semiconductor Mission, supported by outlays exceeding Rs75,000 crore across manufacturing- and design-linked incentives, reflects an understanding that data sovereignty cannot exist without hardware sovereignty. Incentives for electronics components, lithium-ion cell manufacturing and critical mineral processing reinforce this strategic depth.
What emerges is not a defensive framework, but a confident one. This budget reflects a government that has moved beyond proving its digital credentials and is now focused on securing them. By aligning cloud infrastructure, semiconductor capability and data jurisdiction within a single policy architecture, it defines the conditions under which India’s digital economy can mature, innovate and retain sovereignty as it advances towards Viksit Bharat 2047.
Bansuri Swaraj is the Lok Sabha member from New Delhi.