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The Economic Survey 2024-25 cautioned that the transition of India’s workforce into the artificial intelligence era has to be smooth to prevent damage and potential unemployment. This is because if transitions are not carefully managed, workers can experience long-lasting unemployment, with little prospect of catching up to market demands in the long run.
âIndia’s workforce in low-skill and low-value-added services remains vulnerable to AI. Robust enabling institutions are essential to help transition workers to medium- and high-skilled jobs, where AI can augment their efforts rather than replace them,” the Survey said.
“As new auxiliary tasks and sectors emerge from the widespread adoption of technology, enabling institutions facilitate the smooth transition of the workforce to these new jobs, reducing the damage to worker income and preventing loss employability,” it added.
However, the Survey cautioned that AI is still a nascent innovation, leaving much scope for interpretation, and thus, proportionate upskilling.
âMany unknownsâ
âIf one were to look at these trends and the value generation expected from investments, it would appear as if the âAI revolutionâ is here and labour is soon going to be a thing of the past. Unease about what AI entails for workers and what it means for humanity as a whole has become part of daily discussions⊠Since there are many unknowns associated with AI at this point, looking at the present through the lens of previous technological revolutions may provide some insights into the way forward,” the Survey noted.
The Survey also called for a tripartite compact between the government, private sector and academia to ensure that AI-driven productivity gains are widely distributed, and lead to an inclusive growth strategy. It also called for capacity-building and the development of institutions, besides creating âsafety netsâ to shield existing workers from AIâs economic and social fallouts.
âThe latter is of paramount importance, because if transitions are not carefully managed, workers can experience a long-lasting unemployment, with little prospect of catching up to market demands,” the Survey added.
Not like Industrial Revolution
Sunil Chemmankottil, country manager for India at Swiss workforce solutions firm Adecco, said that unlike the Industrial Revolution, the AI revolution as cited by the Survey is âfundamentally different.”
âWe are already aware that AI is already impacting us, but given the amount of variable equations in the fray, itâs important to try and understand that the question of what skills we should adopt have remained unanswered. For Indiaâs low-skill workforce, productivity is the biggest problem,” Chemmankotil said.
Low productivity leads to low wages, and with nearly 14 million individuals joining Indiaâs workforce each year, this gives AI a big problem to solve. It is this that needs us to prepare better for the future of the workplace, and as a result, the idea of âworkâ is likely to remain in a state of flux for the next three to five years.”
Regulatory frameworks
However, he added that beyond this, it is difficult to get a telescopic view of how AI may alter the workforce ecosystem. âEven as we prepare to upskill, what are the skills that we should impart to the youngest members of our workforce to prepare for the future? That is the variable that remains without an address, as of now,” he said.
The Survey, meanwhile, also called for regulatory frameworks to be updated to align AI with innovation, transparency and accountability. âThe corporate sector has to optimize the introduction of AI responsibly over a longer time period, failing which the onus will fall on the governmentâwhich will resort to taxation of profits generated from technology replacing labour, severely impacting Indiaâs growth potential,” it said.