Union Budget 2026 Highlights AI and Cutting-Edge Technologies

Nirmala Sitharaman mentioned that the function of artificial intelligence (AI) and other advanced technologies will enhance governance and will have a significant impact in the Union Budget 2026-27. According to her, AI could be used as a force multiplier to assist the government in making more proper decisions. It was her ninth successive budget presentation in which she tries to balance growth, fiscal discipline and adoption of technology.

There is a strong emphasis on technological growth in the Union Budget 2026. Since the AI applications to electronic production and IT incentives, the government is interested in enhancing the India role in the global technology. These measures aim at employment, increasing the local production, and promoting innovations through industries.

New Technologies and AI Innovation

The government already made some efforts to facilitate new technologies. This effort includes programs as the AI Mission, National Quantum Mission, Anusandhan National Research Fund, and Research and Development and Innovation Fund (RDI). Such efforts are meant to advance research, establishment of new solutions and creation of an efficient workforce in the new technologies.

Bharat Vistar: AI for Agriculture

Another significant introduction in the Union Budget 2026-27 is the introduction of AI-based multilingual farmers tool Bharat Vistar. It incorporates Agristack portal and ICAR agricultural resources. The tool will assist the farmers to make superior choices, enhance productivity and minimize risks as the tool will offer tailored advisory services. This project demonstrates that the government is concentrated on the application of AI in enhancing major industries as agriculture.

Electronics Manufacturing will Boost

Finance Minister Sitharaman suggested raising the spending on the production of electronics to Rs 22,919 crore to Rs 40,000 crore. The government plan of making India a mobile phone and other electronics hub includes the electronics components scheme that was launched in 2025. The Indian mobile production has almost increased by 30 times, as compared to Rs 18,000 crore in FY15 toRs 5.45 trillion in FY25. This will be a boost to the local electronic sector.

IT and Data Center

Incentives on IT and data center companies are also announced by the government. There will be a tax holiday period of up to 2047 to foreign firms establishing data centers in India. The unified safe harbour margin of IT services will now be at 15.5%. Safe harbour threshold has gone up to Rs 2,000 crore as against Rs 300 crore. The safe harbour approval process will be automatic and rule-based, which means that it will be less complex to companies.

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