Sitharaman Targets Over 10% GDP Growth, Dismisses AI Lag Claims

NEW DELHI — Finance Minister Nirmala Sitharaman announced on 26 September that the government will aim for a real GDP growth rate exceeding 10% in the 2026‑27 fiscal year. The target, she said, hinges on accelerated adoption of technology, innovation and skill development across manufacturing, services and agriculture.

Growth target and policy thrust

Sitharaman outlined a multi‑pronged strategy that includes expanding digital infrastructure, incentivising research and development, and scaling up artificial intelligence (AI) applications in public and private sectors. She noted that the current growth projection of 7.8% for FY26, released by the Ministry of Finance last month, will be superseded by a more ambitious outlook once the policy measures take effect.

The minister referenced the “Technology and Innovation Push” announced in the Union Budget earlier this year, which earmarks ₹12.5 trillion for AI labs, quantum computing centres and start‑up incubators. She added that the government will streamline regulatory approvals for high‑tech projects and expand credit lines for firms that adopt AI‑enabled processes.

Response to AI‑bus criticism

During a press briefing, Sitharaman pushed back against recent commentary suggesting that India had missed the global AI bus. She clarified that the country is already a net exporter of AI talent, with more than 1.2 million professionals working in AI‑related roles, and that domestic AI patents filed in 2025 rose 18% year‑on‑year.

The minister emphasized that the government’s AI roadmap, launched in 2024, is designed to integrate AI into health, education, agriculture and defence. She said the roadmap includes a ₹3.2 trillion fund to support AI adoption by small and medium enterprises, a move she described as essential for broad‑based, inclusive growth.

Economic context and expectations

India’s growth trajectory has slowed from a peak of 8.2% in FY22 to 7.8% in FY26, amid global supply‑chain disruptions and tighter monetary conditions abroad. Analysts have warned that without a technology‑led boost, the economy could fall short of the 8%‑9% range projected by the International Monetary Fund for FY27.

Sitharaman’s 10%‑plus target therefore represents a significant upward revision. She indicated that the target is contingent on maintaining fiscal prudence, with the fiscal deficit projected at 5.5% of GDP for FY27, and on sustaining inflation within the 4%‑6% band set by the Reserve Bank of India.

Political and industry reactions

Opposition parties questioned the feasibility of a double‑digit growth rate, citing the need for structural reforms in labour laws and land acquisition. The Confederation of Indian Industry (CII) welcomed the emphasis on technology but urged the government to address skill gaps, noting that only 28% of the workforce currently possesses advanced digital competencies.

Industry bodies such as NASSCOM and the Federation of Indian Chambers of Commerce and Industry (FICCI) reiterated support for the AI fund, calling it a “game‑changer” for competitiveness. Both groups highlighted the importance of public‑private partnerships to accelerate deployment of AI solutions in logistics and fintech.

Implementation timeline

The finance ministry plans to release a detailed implementation schedule by the end of Q4 2026. Key milestones include the launch of a national AI test‑bed in Hyderabad, the rollout of AI‑enabled agritech platforms in Punjab and Maharashtra, and the establishment of a dedicated AI research council under the Department of Science and Technology.

Stakeholders will be monitored through quarterly performance reviews, with the finance minister reporting progress to the Parliament’s Standing Committee on Finance in early 2027.