AI may be the most overused over the past one year and more, but will it take its rightful place as the centre-piece in Nirmala Sitharaman’s budget outing this year?
Or, as many fear, will it be pulled under the weight of the precarious present geo-political situation, where a perfect storm of tariffs abroad and lack of consumption uptick internally is causing its own crises that the Modi government has to deal with on priority?
Either way, there is no doubt that artificial intelligence (AI) is barely a flavour of the season—by now it is clear that it is going to be an era-defining technology that does not just offer advancements, but could well redefine the global pecking order of nations by their AI prowess.
Naturally, India wants to be up there and is leaving nothing to chance.
AI made more than guest appearances in the last couple of budgets. The budget allocated 2,000 crore for the IndiaAI Mission, part of the total 10,000 crore plus announced for AI one year ago. Significantly, the government had also announced the setting up of an AI Centre of Excellence. While there was much fanfare over the one lakh crore rupees fund of funds for Deep-tech research, much of the AI announcements had focused on education and skilling.
A year later, the stakes are indeed higher. Various cabinet decisions on AI over the months have set the vision mighty clear: India needs to get its act together, particularly considering China’s rising ascendancy in the field. The policy focus and funding priorities then have to be laid out clearly, and there is nothing like the union budget to send the message across the ecosystem on what India’s blueprint for this will be.
The industry is already licking its lips in anticipation. “If AI is to become India’s core digital infrastructure, Budget 2026 must focus on sustained, long-term investments in compute, data centres and cloud capacity,” said Jaspreet Bindra, co-founder of AI&Beyond, an artificial intelligence and tech literacy platform, adding, “This includes a second phase of the IndiaAI Mission with higher outlays for shared AI infrastructure, Centres of Excellence and sector-specific challenges, along with a national compute credit programme to give startups and research institutions affordable access to GPUs and cloud resources on India-based platforms.”
“Continued support for foundation models, open-source AI, deep-tech R&D through tax incentives and grants, and targeted funding for AI deployment in priority sectors such as health, agriculture, education and smart cities will be critical,” felt Bindra. “Equally important is expanding AI literacy initiatives like YUVA.ai to ensure India builds not just AI capability, but a future-ready workforce that can use it responsibly and at scale.”
The signal seems to be clear – AI is everywhere, so it is crucial to see it as an all-pervasive change agent rather than just as a tech threshold one needs to boost. This means AI education and skilling will be needed across domains, primarily to ensure that Indian professionals are attuned and prepared for the changes, as well as use it as an innovation tool for further productivity and wealth creation.
AI literacy will be the foundation block of any government push through the budget, many believe. This is important for two reasons: one, to ensure that the emerging workforce of the country is not found out of step or clueless at the dramatic changes on the anvil, and secondly, to ensure they are prepared to take it further into the realms of higher research and innovation.
A focus on AI and deep-tech in the budget to come could also be significant since the nation is making its big play to be part of the AI acceleration by hosting the global India AI Impact summit next month in the capital.
The event aims to position India as a global leader in responsible and impactful AI development, and will cover seven core themes, or ‘Chakras’ of multilateral action: human capital, inclusion for social empowerment, safe & trusted AI, resilience, innovation & efficiency, science, democratising AI resources, and AI for economic Growth & social good. The event also features a large exhibition in Bharat Mandapam, bringing in hundreds of exhibitors from around the world who will display AI being used for practical uses.