Budget 2026: Why jobs alone aren’t enough - what skills will decide the future of Indian workforce?

Union Budget 2026-27 will be presented in the Parliament by Finance Minister Nirmala Sitharaman on February 1. It will set the government’s economic direction for the year ahead and it will answer how it plans to grow the economy, support citizens, and manage public finances.

The conversation around employment is undergoing a decisive shift as India prepares for the Union Budget 2026-27. The question is no longer about how many jobs the economy can create, but what kind of jobs, and whether India’s workforce is equipped to keep pace with rapid technological, regulatory, and global changes.

From manufacturing floors to fintech dashboards and AI labs, employability today is being reshaped by continuous learning, sector-specific skills, and productivity-linked training. Budget 2026 is expected to play a critical role in aligning education, industry, and employment, especially at a time when global uncertainty and domestic aspirations are colliding.

From degrees to dynamic skills

Experts argue that workforce readiness can no longer rely on one-time qualifications. Dr Debashis Sanyal, Director at Great Lakes Institute of Management, Chennai, emphasised that India’s real challenge lies in adaptability.

“India’s workforce challenge is increasingly about keeping up with change rather than merely meeting initial qualifications. The budget should strengthen continuous learning models that allow professionals to reskill and upskill alongside work,” he says.

He adds, "Greater support for industry-linked programmes, flexible credentials, and faculty capability will help institutions respond faster to shifting skill needs, while ensuring employability keeps up with economic growth."

This emphasis on lifelong learning is also resonating within the startup and fintech ecosystem, where regulatory complexity and digital innovation are advancing simultaneously.

“Ahead of the Union Budget, there is a growing need to move the focus from job creation in numbers to building high-quality, future-ready roles,” says Gaurav Sharma, Chief Human Resources Officer at True Balance (Balancehero India & True Credits).

According to him, higher fund allocation to Skill India programmes, particularly for digital and compliance-focused roles, along with incentives for startups that collaborate with academic institutions, can help create a more prepared workforce. A budget that supports such measures while enabling startups to generate sustainable employment will be critical for responsible growth in the digital economy.”

Textile & apparel: Protecting jobs, building productivity

Few sectors illustrate the jobs and skills linkage as clearly as textiles and apparel, one of India’s largest employers. As the Union Budget approaches, the industry is looking for targeted support to protect livelihoods while upgrading capabilities.

Global trade turbulence, ranging from elevated US tariffs to persistent supply chain disruptions, has placed intense pressure on India’s textile export hubs.

US tariffs of 50 per cent on Indian goods have disrupted export order flows, hitting MSME manufacturers operating on thin margins. Targeted fiscal support for these clusters is now seen as essential to safeguarding jobs, sustaining exports, and preserving India’s manufacturing base.

What opportunities do trade agreements present?

At the same time, upcoming trade agreements present a major opportunity. The UK-India FTA is expected to add over £25 billion ($34-35 billion) in annual bilateral trade over time, while the EU already accounts for nearly €120 billion ($143 billion) in goods trade with India. Budget-led policy alignment can help Indian exporters scale faster, improve market access, and strengthen India’s reputation as a reliable global sourcing hub.

Infrastructure execution will also be key. Accelerating the rollout of PM MITRA parks, with an outlay of ₹4,445 crore through 2027-28 and investment commitments exceeding ₹42,000 crore, can significantly enhance manufacturing scale and efficiency. Crucially, the industry wants a sharper focus on productivity-linked skilling.

“While the Samarth scheme has been extended till March 2026, greater focus on productivity-led upskilling and supervisor-level capabilities will be critical to sustaining global competitiveness,” says Sanjay Jain, Group CEO, PDS Limited.

IT & tech: From volume hiring to high-value jobs

In the technology sector, hiring is clearly shifting from scale to specialisation. Neeti Sharma, CEO of TeamLease Digital, points out that demand is rising for roles in AI, data platforms, cloud security, and product engineering. She expects Budget 2026 to prioritise digital infrastructure, AI ecosystems, cloud platforms, and R&D, with a strong push for digital upskilling in Tier-2 and Tier-3 cities.

“A strong push on AI, data infrastructure, R&D and digital upskilling can turn technology investments into real jobs and productivity gains,” she says. Support for deep-tech startups, stronger research ecosystems, simpler digital labour compliance, and an expanded EPFO wage ceiling could together help create sustainable, high-value tech jobs—positioning India for long-term global leadership.