INDIA: Amid accelerating technological disruption, rising citizen expectations, and increasing fiscal and cyber pressures, KPMG International’s Global Tech Report 2026 – Government and Public Sector reveals a sector at a pivotal moment—moving beyond siloed digital modernisation programmes towards outcome‑led, mission‑driven technology transformation that delivers sustained public value.
The report captures insights from 115 government leaders, executives, and technology decision‑makers from around the world, offering a focused view of how public sector organisations are embracing artificial intelligence (AI), data, cybersecurity, and digital foundations while grappling with challenges around scale, skills, and governance.
As governments accelerate toward a more digital, data‑driven future, the research highlights a clear shift from tactical projects to enterprise‑wide transformation. While AI and cybersecurity remain high on the agenda, leaders are placing renewed emphasis on strengthening core digital foundations, including cloud platforms, enterprise systems, data management capabilities, workforce skills, and ecosystem partnerships, to build resilience and improve service delivery in an increasingly complex environment.
The findings underscore that ambition continues to outpace execution. Many public sector organisations are still constrained by fragmented data environments, organisational silos, legacy technology debt, and talent shortages, limiting their ability to scale pilots and convert innovation into sustained, measurable impact. In response, leading governments are sharpening their technology strategies, adopting citizen‑centric design principles, and forming trusted, outcome‑focused partnerships to accelerate execution, strengthen delivery confidence, and unlock long‑term public value and trust.
Nilachal Mishra – Partner and Head, Government and Public Services, KPMG in India, said, “India’s public sector stands at a critical juncture as it moves from digital implementation to intelligent, outcome-led transformation. While AI, data, and cloud provide the technological impetus, lasting impact will depend on three foundations: robust digital infrastructure, seamless institutional integration, and trusted cross-sector partnerships. By embedding citizen-centric design, responsible AI, and resilient operating models into the core of government, India can accelerate execution, enhance public trust, and deliver long-term value at scale“.
Key findings from the Global Tech Report 2026 – Government and Public Sector include:
- 89 per cent describe themselves as technology innovators or fast followers, signaling strong transformation intent
- 86 per cent believe managing AI agents will become an important workforce skill within the next five years, reinforcing the urgency of talent and capability transformation
- 64 per cent plan to increase investment in cybersecurity over the coming year, reflecting heightened risk and threat awareness
- 59 per cent expect to increase budgets for data and analytics, many by more than 10 per cent, to improve insight‑driven decision‑making
- 55 per cent say they are getting 40 per cent or more of their financial value from foundational and core tech
- 48 per cent of government respondents say they will be deploying AI use cases into production at scale within the next 12 months
- 43 per cent admit they are hitting roadblocks in scaling digital and AI initiatives across the enterprise
- 40 per cent anticipate spending more than 40 per cent of their technology budgets on maintaining legacy environments, highlighting the drag of technical debt
Taken together, the insights point to a government and public sector at a critical inflection point. Those organisations that invest in strong digital foundations, responsible and scalable AI, cyber resilience, and workforce capability—while maintaining a human‑centric, outcomes‑driven approach—will be best positioned to deliver trusted, resilient, and citizen‑focused services in the Intelligence Age.