The article was first published in The Financial Express on February 09 2026. Please click here to read the article.
The intent of the budget and the Government was very clear in this budget – there is no stopping us from becoming an economic powerhouse and human capital is at the core of achieving this.
This budget had human capital development focused on those sectors that are labour intense such as agriculture, textiles, leather, toys, rural economy, MSME etc. and the emerging ones such as healthcare, pharma, entertainment, hospitality etc. Also, prominent was the plan to bring AI and its impact on these sectors.
Premium institutions such as IITs, AIIMS, NIMHANS etc., had some allocations for expansion. But new institutions and initiatives, which were prominent in this budget, are the highlights. The Budget had a big focus on youth and these new institutions are aligned to industries that create ‘employment pathways’. Similarly, skilling programs were linked to not just sectors but beyond that to job roles that will bring employment today and in near future.
Let’s take Healthcare and Pharma as a case in point. These sectors received a strong boost with the launch of the Biopharma SAKTHI Mission, backed by an outlay of ₹10,000 crore. This initiative aims to move India beyond its traditional strength in generics and into the higher value segments of biologics and biosimilars. The establishment of three new NIPERs, along with the creation of 1,000 clinical trial sites, is expected to strengthen India’s position against leading global biotechnology hubs by ensuring that innovation progresses seamlessly into domestic manufacturing.
The announcement of three new All India Institutes of Ayurveda signals the start of a new phase for India’s healthcare ecosystem. In parallel, the setting up of AYUSH drug testing laboratories and the expansion of the WHO Global Centre for Traditional Medicine in Jamnagar have the potential to open global markets for traditional therapies, reinforcing India’s image as a hub for holistic healthcare models.
To address the growing worldwide demand for skilled healthcare personnel, the budget sets ambitious training targets: one lakh allied health professionals and 1.5 lakh multi skilled caregivers. By introducing standardised training in areas such as optometry and radiology, India could emerge as a “healthcare export workforce,” meeting domestic requirements while also supporting the ageing populations of developed economies.
Additionally, the proposed five regional medical hubs could foster multidisciplinary skill development, where medical education extends beyond clinical training. These centres would prepare professionals in areas like medical value tourism, equipping them to meet international patient care standards while also driving innovation within India’s healthcare system.
The Indian Institute of Creative Technologies (IICT) is another strong example of this forward looking approach. By building capabilities in animation, visual effects, gaming, comics, and extended reality (AVGC XR), IICT addresses skills that are becoming central to the entertainment industry across platforms. This initiative highlights how digital technologies can simultaneously generate employment and accelerate sectoral growth in India’s vast entertainment market-an area where much of the talent demand is currently met from outside the country.
Several new institutions announced in the budget reflect a clear alignment with domestic employment needs while also preparing India’s youth for global opportunities. The decision to establish a National Institute of Design in the North‑East is particularly significant, as it integrates the region’s distinctive cultural and artistic traditions into mainstream design education, enriching it with diversity and local character. Likewise, the proposed National Institute of Hospitality aims to professionalise India’s fast‑expanding tourism sector by creating a skilled workforce equipped to meet international service standards.
The budget also introduces incentives for private participation in setting up veterinary and para‑veterinary colleges through loan‑linked subsidies. This measure could significantly strengthen the sector by training over 20,000 young professionals and addressing long‑standing skill shortages. In addition, Samarth 2.0 seeks to modernise the textile skilling ecosystem-protecting India’s traditional crafts while enhancing productivity, adopting modern tools, and building globally competitive brands.
For the first time, the policy formally acknowledges the value of integrating industry and education within shared ecosystems, drawing on models where such collaboration has emerged naturally. The proposed university townships, located close to major industrial and logistics corridors, are designed to deepen industry–academia collaboration by fostering integrated Knowledge‑Industrial‑Economic Zones. In these environments, students gain practical exposure by learning alongside active industries, ensuring education remains closely aligned with real‑world production and innovation.
The budget also introduces targeted interventions to increase women’s participation in the workforce. A key initiative is the establishment of girls’ hostels in every district, aimed at supporting female students pursuing STEM education and reducing access barriers. In parallel, women‑led entrepreneurship and small businesses receive a boost through mechanisms such as the SME Growth Fund, the Corporate Mitra programme, and SHE Marts. Together, these measures are intended to strengthen rural women’s enterprises and self help groups by improving access to capital, mentorship, and market linkages.
Budget 2026–27 signals a decisive shift in allocation for education-not as an end in itself, but as a means to boost employment and enterprise. The proposed high‑powered Education-to-Employment and Enterprise Standing Committee captures this intent very well - aligning learning with industry demand and entrepreneurship. By embedding AI into education and skilling, promoting startups, and bridging education with industry needs, the budget can be seen as way to connect with NEP 2020 philosophy as well. This approach can turn India’s demographic strength into a globally competitive workforce, powering services led growth and moving the country closer to the goal of a Viksit Bharat.
