Union Minister for Finance and Corporate Affairs Ms. Nirmala Sitharaman presented the Union Budget 2026 outlining a development roadmap anchored in a Three Kartavya (three duties) framework, which guides the government’s financial planning and reform priorities.
- Accelerate and sustain economic growth along with building resilience
- Fulfill the aspirations of the people through capacity building
- Ensure every family, community, and region has access to resources, amenities and opportunities
Across these priorities, a significant share of the reforms is centred on skills development as a driver of productivity, employment, and inclusive growth.
As per an update from MSDE, the 2026-27 budget for the Ministry of Skill Development and Entrepreneurship (MSDE) has been increased from ₹6,100 crore to ₹9,885.80 crore. The 62% increase reinforces the commitment to enhancing youth employability, supporting entrepreneurship and strategic capacity building for a Viksit Bharat.
Six Reform Pillars Driving Growth and Employment
To create employment, boost productivity, and accelerate economic growth, the government has undertaken comprehensive reforms across six key areas:
- Scaling up manufacturing in seven strategic and frontier sectors
- Rejuvenating legacy industrial sectors
- Creating champion MSMEs
- Developing a powerful push for infrastructure
- Ensuring long-term security and stability
- Developing city economic regions
Budget 2026-27: Key Highlights on Skill Education
India Semiconductor Mission 2.0
The government announced India Semiconductor Mission 2.0 with an outlay of ₹40,000 crore, aimed at strengthening India’s high-tech manufacturing ecosystem. Key focus areas include:
- Industry-led research and training centres for semiconductors
- Skill development aligned with advanced manufacturing needs
- Support for mineral-rich states such as Odisha, Kerala, Andhra Pradesh, and Tamil Nadu
Chemicals and Textiles
- A new scheme will support states in establishing three dedicated chemical parks through a challenge-based route to boost domestic manufacturing capabilities.
- The government will promote the creation of mega textile parks to strengthen India’s textile sector.
- The Mahatma Gandhi Gram Swaraj Initiative has been launched to strengthen Khadi and handloom, support rural artisans, and promote traditional crafts.
MSMEs and Capital Goods Capability
To create future-ready enterprises, the budget proposes setting up a ₹10,000 crore MSME Growth Fund to nurture champion MSMEs.
To strengthen capital goods capability and industrial productivity, the government announced:
- Establishment of high-tech tool rooms by CPSEs at two locations as digitally enabled automated service bureaus for high-precision component design, testing, and manufacturing.
- Introduction of a scheme for enhancement of construction and infrastructure equipment (CIE), covering elevators, fire-fighting equipment, tunnel-boring machinery, and equipment for metros and high-altitude roads.
Additionally, professional institutions such as ICAI and ICSI will be supported to design short-term modular courses to help MSMEs meet compliance and regulatory requirements.
Services Sector and Employment-Led Growth
Recognising the services sector as a core driver of Viksit Bharat, the government proposed the creation of a High-Powered ‘Education to Employment and Enterprise’ Standing Committee.
The committee will:
- Identify opportunities for growth, employment, and exports
- Focus on making India a global services leader with a 10% global share by 2047
- Assess the impact of emerging technologies, including AI, on jobs and skill requirements and recommend appropriate measures
Creating 5 University Townships in the vicinity of major industrial and logistics corridors
- The Government will support states in creating 5 university townships in the vicinity of major industrial and logistic corridors.
- These planned academic zones will host multiple universities, colleges, research institutions, skill centres and residential complexes.
Tourism, Hospitality, and Sports Development
Tourism and Hospitality
- Establishment of a National Institute of Hospitality to act as a bridge between academia, industry, and government.
- A pilot program in collaboration with IIMs will train and upskill 10,000 tourist guides across 20 iconic sites through 12-week courses.
- India will be promoted as a medical tourism hub, with support for states to set up five regional hubs.
Khelo India Mission
The Khelo India Mission will be strengthened through:
- Integrated talent development pathways at foundational, intermediate, and elite levels
- Systematic development of athletes and support staff
- Integration of sports science and technology into training and performance
- Expansion of competitions, leagues, and sports infrastructure
Healthcare, Medical Value Tourism, and Allied Skills
To position India as a global destination for Medical Value Tourism (MVT), the budget announced the “Heal in India” initiative, which includes:
- Establishing five regional medical tourism hubs in partnership with the private sector
- Integrated complexes with modern hospitals, diagnostics, and post-care rehabilitation
The MVT sector is projected to grow to $13.42 billion by 2026, supported by simplified visa procedures and cost-effective treatment options.
To support healthcare workforce needs:
- Existing institutions will be upgraded to train Allied Health Professionals (AHPs) in fields such as optometry, radiology, anesthesia, and behavioural health.
- A new initiative will train 1.5 lakh geriatric and allied caregivers over the next five years.
Budget 2026-27 on Education, Skilling, and Human Capital Development
Union Budget 2026 places education at the centre of India’s growth strategy with a strong focus on skills, AI-driven learning, and employability.
Key announcements include:
- Setting up three new National Institutes of Pharmaceutical Education and Research, upgrading seven existing institutes, and establishing 1,000 accredited clinical trial centres.
- Expansion of short-term modern courses by ICAI and ICSI, with the Corporate Mitra initiative extended to Tier-2 and Tier-3 cities.
- Launch of an AI Mission, supported by a National Research Fund and Innovation Fund, with a focus on women in STEM and youth in technology.
- Training of one lakh allied health professionals through selected higher education institutions.
- Establishment of new Ayurveda institutes, national mental health institutes, and AVGC content creator labs in schools and colleges.
- Proposal to establish a new design institute in eastern India.
- One girls’ hostel in every district to improve access to education.
- Reduction of TCS on education to 2%, easing financial barriers for learners.
Also read: Union Budget 2025-26: Highlights on Skills, Education, Employment, and Entrepreneurship
Empowering Divyangjan through Skills and Technology
The budget introduced two dedicated schemes to support Divyangjan with dignified livelihood opportunities:
- Divyangjan Kaushal Yojana, focused on industry-relevant, customised training tailored to different Divyang groups.
Divyang Sahara Yojana, which will support ALIMCO to scale up production of assistive devices, invest in R&D and AI integration, strengthen PM Divyasha Kendras, and establish Assistive Technology Marts as modern retail-style centres.
Union Budget 2026 adopts a focused, implementation-led approach to growth by aligning skills, institutions, and industry needs across key sectors. With targeted support for manufacturing, services, healthcare, and emerging technologies, the budget strengthens workforce readiness while expanding access to opportunities across regions and communities; supporting India’s long-term economic transition.
