Union Budget 2026–27: Jobs, Skilling & Growth Insights

Union Budget 2026–27: Boosting Jobs, Skills & Growth More innovative, less ambitious in numbers but smarter in strategy

“Yuva Shakti” is positioned as India’s economic edge, with GDP growth projected at 6.8–7.2%. Let’s compare this with the 2025–26 blueprint, alongside this year’s representation.

Let’s dive in, focusing on the sectors that matter most to us: employment, skilling, and jobs.

Key Highlights of the 2026–27 Budget

Core Focus

Emphasizes youth power, productivity, capabilities, and inclusive opportunities under Viksit Bharat.
Total education and skilling spend increased by ~5% to ₹1.35 lakh crore, up from ₹1.28 lakh crore last year.

Skilling Upgrades

New Education to Employment and Enterprise (EEE) Committee to align education with job needs, especially in services and AI, targeting a 10% global services export share by 2047.
IIT Creator Labs in top institutes.
AVGC (Animation, Visual Effects, Gaming, Comics) Content Creator Labs in 15,000 schools and 500 colleges, aiming to train 2 million professionals by 2030.
Training of 1.5 lakh multiskilled caregivers for the care economy.
Divyangjan Kaushal Yojana for customized disability training and Divyang Sahara for assistive devices.
Samarth 2.0 for textile skilling through industry collaboration, along with mega textile parks focused on technical textiles.
Establishment of a new National Institute of Design in East India.
Girls’ hostels in every district to improve female access to employment.

Job Creation Drives

Khelo India Mission extended for a decade, integrating technology for sports coaching, infrastructure, and manufacturing jobs.
Agriculture boost through programs for high-value crops such as cashews, cocoa, and nuts, along with subsidies for veterinary facilities to promote rural entrepreneurship.
Services sector push via medical value tourism hubs and training allied health professionals across 10 specialized fields.
Women-focused initiatives, including Self-Help Entrepreneur (SHE) Marts and strengthened PM Divyasha Kendras as retail hubs.
MSME incentives for labor-intensive manufacturing.
Continuation of PLI schemes, which created 12.6 lakh jobs by September 2025.

Broader Impact

Addresses employability gaps, with only 56% of graduates currently job-ready.
Targets unemployment at around 5.2%.
Responds to demographic realities, with India’s working-age population projected to peak in 2041.
TDS Clarity for Manpower Services: The supply of manpower services is now proposed to be explicitly covered under TDS on payments to contractors, reducing ambiguity. TDS on these services will apply at 1% or 2%, simplifying compliance for businesses.

How It Stacks Up Against the 2025–26 Budget

Overall Shift

2025–26 focused heavily on manufacturing-led growth through PLI and skilling 4.1 crore youth.
2026–27 pivots toward services, digital, and creative sectors, aiming for diversified and higher-quality jobs, with stronger emphasis on outcomes over volume.

Skilling Comparison

2025–26 initiatives included ITI upgrades, Flexi-MoUs for customized training, PM Vishwakarma for artisans, Rural Prosperity programs, and AI Centers of Excellence with ₹500 crore funding across five national hubs.
2026–27 approach is more targeted, such as AVGC labs instead of broad ITI upgrades, and focused caregiver training instead of large aggregate skilling targets. It also introduces global partnerships and deeper AI integration.
Gender focus: The previous year’s 37% Gender Budget hike to ₹4.49 lakh crore centered on women’s manufacturing roles and safety. This year continues momentum through SHE Marts and hostels, though without a major percentage increase.

Job Growth Contrast

2025–26 outcomes included:
- ₹2 lakh crore in PLI investments
- 12.6 lakh jobs created
- Focus Product Scheme targeting 22 lakh jobs in footwear and leather
- MSME limits doubled, supporting 7.5 crore workers
- Gig workers brought under e-Shram and healthcare coverage
2026–27 diversifies beyond manufacturing:
- Creative jobs through AVGC and sports ecosystems
- Expanded agri and fisheries value chains with clearer sector-specific focus
- Fewer explicit numerical targets, but stronger institutional oversight through the EEE Committee
Fiscal context:
- Both budgets allocate around 4% of GDP to education and skilling
- Capex stands at ₹12.2 lakh crore this year
- Labor code reforms from 2025 remain a carryover, with potential to add 77 lakh jobs

Evolution

2025–26 laid the manufacturing base.
2026–27 fills gaps in services and inclusivity, particularly for divyangjan groups that were less visible earlier.

Strengths, Challenges, and Outlook

Wins

Strong focus on AI and digital skilling.
Creative sectors like AVGC positioned for high-value exports.
Caregiver training addresses aging demographics.
Women and divyangjan inclusion could lift workforce participation by 1–2%.
Potential for 7–7.5% GDP growth with 8.7 lakh or more jobs per quarter.

Hurdles

Modest budget increase may fall short of the needs of a 64.8% working-age population.
Risk of scheme dilution without tight monitoring.
Mixed execution of last year’s large targets, along with ongoing wage stagnation and low female labor force participation.

Potential

Strong capacity to reshape the workforce amid technological shifts.
Textile and fisheries initiatives help bridge rural–urban employment gaps.
Services sector benefits from a 61.5% consumption-driven economy, though state and private-sector coordination remains critical.