Budget 2026–27 and IndiaAI: What to watch for if AI is to strengthen state capacity

By Arshi Aadil, Lead Social Protection and Policy, MSC

In a public hospital, the hardest part is often not the treatment itself, but the administrative hurdles around it in the form of paperwork, eligibility checks, approvals, delays, and repeated visits. For citizens, this is what the state feels like in practice: not policy intent, but the ability to deliver services reliably and correct errors quickly. AI can help administrations spot bottlenecks early, route grievances faster, and reduce avoidable delays so delivery improves without reducing accountability. This is not about automating entitlements; it is about strengthening the administrative systems around them. This is why the AI debate in India needs to be anchored in state capacity, not just innovation.

Union Budget 2026–27 is an opportunity to make that shift concrete. India has already signalled intent through the IndiaAI Mission, approved by the Union Cabinet with an outlay ...