Budget 2026 | AI impact on jobs and services: Panel to look at the road ahead

3 min readNew DelhiFeb 2, 2026 06:32 AM IST

Renewing the government’s focus on the services sector in India, Union Finance Minister Nirmala Sitharaman in her Budget Speech on Sunday said a high-level ‘Education to Employment and Enterprise’ Standing Committee will be formed to recommend measures that focus on the services sector. The committee will prioritise areas to optimise the potential for growth, employment and exports. It will also assess the impact of emerging technologies, including AI, on jobs and skill requirements and propose related measures.

“21st Century is technology driven. Adoption of technology is for the benefit of all people – farmers in the field, women in STEM, youth keen to upskill and Divyangjan to access newer opportunities. The government has taken several steps to support new technologies through the AI Mission, National Quantum Mission, Anusandhan National Research Fund, and Research, Development and Innovation Fund… Our government has therefore decided to place a renewed emphasis on the Services Sector to provide a pathway to fulfilling aspirations of a youthful India,” Sitharaman said in her Budget speech.

The indicative terms of reference of the high-level standing committee, according Budget documents:

Identify services sub-sectors with potential for growth, employment and exports, identify sector-specific gaps and measures to unlock employment potential
Identify cross-sectoral policy and regulatory issues, including standards-setting and accreditation
Examine areas for services export
Assess the impact of emerging technologies, including AI, on jobs and skill requirements
Propose specific measures for embedding AI in the education curriculum from school level onwards and upgrading State Councils of Educational Research and Training institutes for teacher training
Propose measures for upskilling and re-skilling of technology professionals/engineers in AI and emerging technologies
Propose measures for AI enabled matching of worders, jobs and training opportunities
Propose measures to make the informal workflow visible, verifiable and future-ready, to enhance upward mobility prospects
Propose steps to be taken to attract skilled diaspora and foreign talent into the country

The announcement comes amid heightened concerns of AI’s impact on jobs, as employees across sectors face layoffs, with enterprises increasingly turning to automation. The Economic Survey 2025-26 had called for a comprehensive sectoral mapping of jobs outside the white-collar workspace, which have a high-skill requirement but are understaffed, which is an often-overlooked source of new jobs within the economy. This could also subside some of the impending risks that AI can have on current jobs on offer.

Recognising India’s IT sector’s global leadership in software development services, the Finance Minister said that services such as IT-enabled services, knowledge process outsourcing services and contract R&D services relating to software development are proposed to be clubbed under a single category of Information Technology Services with a common safe harbour margin of 15.5%. The threshold for availing safe harbour for IT services is being enhanced substantially from Rs 300 crore to Rs 2,000 crore.

Soumyarendra Barik is a Special Correspondent with The Indian Express, specializing in the complex and evolving intersection of technology, policy, and society. With over five years of newsroom experience, he is a key voice in documenting how digital transformations impact the daily lives of Indian citizens.
Expertise & Focus Areas Barik’s reporting delves into the regulatory and human aspects of the tech world. His core areas of focus include:

The Gig Economy: He extensively covers the rights and working conditions of gig workers in India.

Tech Policy & Regulation: Analysis of policy interventions that impact Big Tech companies and the broader digital ecosystem.

Digital Rights: Reporting on data privacy, internet freedom, and India’s prevalent digital divide.

Authoritativeness & On-Ground Reporting: Barik is known for his immersive and data-driven approach to journalism. A notable example of his commitment to authentic storytelling involves him tailing a food delivery worker for over 12 hours. This investigative piece quantified the meager earnings and physical toll involved in the profession, providing a verified, ground-level perspective often missing in tech reporting.
Personal Interests Outside of the newsroom, Soumyarendra is a self-confessed nerd about horology (watches), follows Formula 1 racing closely, and is an avid football fan.
Find all stories by Soumyarendra Barik here. … Read More

Source link