Budget 2026: Fiscal deficit target pegged at 4.3 pc for 2026-27; High-powered panel to assess AI impact on jobs

NEW DELHI: Presenting the Union Budget, Finance Minister Nirmala Sitharaman has pegged fiscal deficit at 4.3 per cent of the GDP for the year 2026-27, as against 4.4 per cent being targeted in 2025-26. The difference between total revenue and total expenditure of the government is termed as the fiscal deficit.

It is an indication of the total borrowings that may be needed by the government. The government had intended to bring the fiscal deficit below 4.5 per cent of GDP by the financial year 2025-26, and is on the path to achieving it.

The Union government in the Budget for 2026-27 has outlined a comprehensive economic roadmap aimed at strengthening India’s self-reliance while keeping the country firmly integrated with global markets.

To sustain and accelerate the economic momentum, Finance Minister Sitharaman has identified seven key areas for intervention. These include scaling up manufacturing across seven strategic and frontier sectors and promoting city-based economic regions as new engines of growth.

Watch Live: Smt @nsitharaman presents Union Budget 2026–27 in Parliament #ViksitBharatBudget @sansad_tv @PIB_India https://t.co/DieMezvgTp

— Nirmala Sitharaman Office (@nsitharamanoffc) February 1, 2026

As part of its sector-specific initiatives, the government has announced plans to position India as a global hub for bio-pharmaceutical manufacturing. A new programme, Bio Pharma Shakti, with an outlay of Rs 10,000 crore over five years, aims to build a strong ecosystem for the domestic production of biologics and biosimilars.

In the technology and minerals space, the government has announced the launch of India Semiconductor Mission 2.0, alongside industry-led research and training centres to build a skilled workforce.

The government on Sunday announced the setting up of a high-powered Education to Employment and Enterprises Standing Committee to strengthen employment outcomes and assess the impact of emerging technologies, including artificial intelligence, on jobs and skill requirements.

Finance Minister Nirmala Sitharaman said the proposed committee will recommend measures with a special focus on the services sector as a core driver of economic growth.

In her budget speech, the Finance Minister said the initiative is aimed at providing a clear pathway to fulfilling the aspirations of a youthful India. “To provide a pathway to fulfilling aspirations of a youthful India with the following measures, I propose to set up a high-powered Education to Employment and Enterprises Standing Committee to recommend measures that focus on services sector as a core driver of economic growth,” she said.

Sitharaman said the services sector holds the potential to position India as a global leader, with a target of achieving a 10 per cent share in the global services market by 2047. She said the committee will prioritise key areas to optimise the potential for growth, employment generation, and exports.

The Finance Minister said the standing committee will also assess the impact of emerging technologies on the labour market. This includes the impact of artificial intelligence on jobs and evolving skill requirements. Based on its assessment, the committee will propose measures to ensure that the workforce is equipped to adapt to technological changes.

FM Sitharaman stated “They will also assess the impact of emerging technologies, including AI, on jobs and skill requirements and propose measures thereof”.

Highlighting the need to create diverse and skilled career opportunities for young people, Sitharaman announced targeted interventions to create a new range of skilled career pathways for India’s youth. These interventions are aimed at aligning education and training systems with emerging employment opportunities.

As part of this initiative, the Finance Minister said existing institutions for allied health professionals will be upgraded. In addition, new allied health professional institutions will be established in both private and government sectors.

She said these institutions will cover 10 selected disciplines, including Optometry, Radiology, Anesthesia, Operation Theatre Technology, Applied Psychology, and Behavioural Health. The focus on allied health professions is aimed at expanding employment opportunities while supporting the growing demand for healthcare-related services.

The Finance Minister said these measures will lead to the addition of one lakh allied health professionals over the next five years. So by focusing on services, skills, and the impact of new technologies, the government aims to support sustainable employment growth and strengthen India’s position in the global economy.

Nirmala Sitharaman has also proposed targeted support for mineral-rich states such as Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated rare-earth corridors, building on a rare earth permanent magnet scheme launched in 2025.

In her initial remarks, Sitharaman said that since her government assumed office, India’s economic trajectory was marked by fiscal discipline and sustained growth. She stressed that the government led by Prime Minister Narendra Modi has chosen action over ambivalence, and reform over rhetoric, keeping Atmanirbharta or self-reliance as a lodestar.

“Since we assumed office 12 years ago, India’s economic trajectory has been marked by stability, fiscal discipline, sustained growth and moderate inflation,” she said. She continued that India will balance ambition with inclusion going ahead.

Finance Minister Sitharaman presented her record ninth consecutive Union budget today in the Parliament. On Thursday, Union Finance Minister Nirmala Sitharaman tabled the Economic Survey of India in Parliament for the financial year 2025-26.

The tabling of the Economic Survey ahead of the Budget follows the long-standing tradition of outlining the state of the economy before detailing future fiscal plans. The document provided a comprehensive, data-backed review of the economy’s performance over the previous year and offers a broad roadmap for future policy direction. As the government’s flagship annual report, it reviews key economic developments over the past 12 months.

India’s real GDP growth for 2026-27 is projected in the range of 6.8-7.2 per cent, reflecting sustained medium-term growth capacity amid a challenging global environment. (ANI)