Will budget 2026-27 finance India’s 'Human Stack' for the AI era?

As the global technology landscape shifts from basic digitisation to "Agentic AI" and sovereign cloud infrastructures, India’s IT and skilling sectors are looking toward the Union Budget 2026-27 for more than just tax breaks. The industry consensus is clear: the next fiscal year must mark the transition of technology from a "business enabler" to "core national infrastructure."

With the IndiaAI Mission already in motion, the conversation has moved toward the "Human Stack", the specialised workforce required to run a high-tech economy.

Treating Technology as Strategic Infrastructure

Industry leaders are advocating for a shift in how the government views the tech ecosystem. Rather than siloed allocations for software or hardware, there is a push for "Sovereign AI" stacks and localised data governance that can protect and power the nation’s digital economy.

This sentiment is being echoed across the GCC  landscape, where India now serves as the "brain capital" for the world. To maintain this lead, experts suggest the budget must move from funding "pilots" to funding "infrastructure" that supports 10,000+ GPU compute capacities and trusted data pipelines.

Khadim Batti, Co-founder & CEO of Whatfix, believes this recalibration is essential for India to move from a participant to a dominant force in the global value chain.

“India’s role in the global technology value chain is evolving from scale and efficiency to strategic depth, with AI being the power lifter. As long-term capital flows into Global Capability Centres, sovereign cloud infrastructure, and deep-tech R&D, the importance of clear and predictable policy frameworks becomes critical. Tax certainty, workforce readiness, and AI governance will be central to enabling sustainable, globally competitive growth.”

Skilling for the "Agentic" era

The skilling narrative for 2026 is no longer about basic coding. It is about "outcome-led" capabilities in AI, cybersecurity, and product-led engineering. The Ministry of Skill Development and Entrepreneurship (MSDE) has already developed over 600 new-age job roles, but the industry is looking for deeper integration with the private sector.

The expectation is for the budget to ring-fence an “AI translation” component, funding that moves AI from the research lab to the shop floor of MSMEs and small businesses. Venkatesan Vijayaraghavan, Chief Operating Officer at Virtusa, emphasises that this transition depends heavily on how the government incentivises corporate-led talent development.

“As India looks ahead to Union Budget 2026–27, the sustained focus on digital capability building and talent development provides a strong base for a future-ready workforce. Continued investments in skills across AI, data, cloud, and digital engineering are strengthening India’s ability to support complex enterprise transformation programs at global scale. Across the technology services sector, companies are focused on building delivery-ready talent through enterprise-led training, apprenticeships, and structured early-career programs. Budget provisions that help scale these efforts and enable closer collaboration with educational institutions can sustain this momentum and reinforce India’s position as a global hub for digital services delivery.”

The IT & skilling wishlist: 2026-27

The "Human Capital" challenge

While the budget may deploy a USD 1 Trillion R&D war chest through 2031, the real bottleneck remains adoption. It is an observation that a compute stack without a skilled workforce to manage it is a wasted asset. Budget 2026-27 is expected to be judged on whether it finances the "people-capacity" push, training teachers in AI pedagogy and credentialing shop-floor workers in automated quality control.

As India targets a USD 7 Trillion economy by 2030, the IT and skilling sectors are no longer just supporting players; they are the foundation upon which "Viksit Bharat" will be built.