Budget 2026: Government to deploy 15,000 animation labs in schools

The government announced a major expansion of creative technology infrastructure in the Union Budget 2026-27, pledging support for 15,000 secondary schools and 500 colleges to establish animation, visual effects, gaming and comic (AVGC) content creator labs in partnership with the Indian Institute of Creative Technologies Mumbai.

Finance Minister Nirmala Sitharaman said the AVGC sector is projected to require 2 million professionals by 2030, representing a significant skills gap in the rapidly expanding orange economy.

The budget also proposes establishing a new National Institute of Design through a challenge route to address shortages in the design sector, where domestic talent hasn’t kept pace with industry growth.

The announcements come as the gaming industry undergoes fundamental restructuring following the Promotion and Regulation of Online Gaming Bill passed in August 2025. That legislation prohibited real money gaming while formally recognising esports as a competitive sport, effectively reshaping an industry that had grown to serve 80-100 million annual users.

The gaming ban’s immediate impact has been severe. Real money gaming, which had been projected to grow at 12-15% annually, ceased operations. Adjacent sectors, including digital advertising, sponsorships and payment infrastructure, also faced disruption.

However, the regulatory shift has opened new growth channels. The esports market, currently valued at approximately $40 million, is projected to expand at 30-35% annually as companies pivot toward casual gaming formats and competitive esports ecosystems. Average revenue per paying user in gaming has already grown from $2-5 in 2020 to $25-30 in 2024.

The education initiatives appear designed to channel talent into growth areas like animation and visual effects while supporting the gaming industry’s transition away from real money formats. With over 500 million digital gamers nationally, policymakers are betting that infrastructure investments can position the country as a major hub for content creation and game development.