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The government has spoken about the concerns of labour market disruptions due to developments in the field of artificial intelligence, while stating that the ground wasn’t ready yet for large-scale adoption of AI. In its Economic Survey 2024-25, the government also suggests measures to tackle socio-economic disruptions due to AI, including building robust institutions.
The pre-Budget document discussed the possible disruptions due to AI and its economic impacts in a chapter titled Labour in AI Era: Crisis or Catalyst?
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The Economic Survey 2024-25 says although the impact of AI on labour will be felt globally, the problem is magnified in case of India because of its size and relatively low per-capita income.
“It will leave everyone worse off and the country’s growth potential will suffer as a result,” it says.
The Indian government’s report talks about how in a few years’ time, “intelligent machines will be capable of performing tasks that are predominantly handled by humans today”.
It sees AI outperforming humans in critical decision-making processes in sectors like healthcare, criminal justice, education, business and financial services, among others.
The report flags concerns about the impact of AI on the labour market, particularly entry-level jobs.
It talks about appropriate skilling and education to take advantage of technologies like AI.
MILLIONS OF JOBS AT RISK DUE TO AUTOMATION
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There is a reason why the government has dedicated so much attention to AI. Developments in the field are expected to turn economic systems and how businesses are done on their heads.
Then there is the threat of large-scale automation of jobs, which is particularly of concern for a labour-surplus country like India.
The Economic Survey quotes an International Labour Organisation (ILO) study, saying nearly 75 million jobs globally are at complete risk of automation due to developments in the field of AI. It quotes Goldman Sachs economists stating that “nearly 300 million full-time jobs remain exposed to AI-driven automation”.
The paper also talks about the uncertainty lurking in the minds of white-collar Indian workers because of AI.
It quotes an IIM Ahmedabad Survey that highlights how 68% of the surveyed expected their jobs to be partially or fully automated by AI in the next five years.
Because much is in the realm of the unknown, the Economic Survey suggests “looking at the present through the lens of previous technological revolutions” for insights and a way forward.
INSTITUTIONS NEEDED TO TRANSITION WORKERS: ECONOMIC SURVEY
The survey suggests “societal response”, including the building of institutions to reduce the socio-economic impact of the disruptions and enabling workers to transition to new jobs.
“As India’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 Economic Survey report suggests.
It also talks about insuring institutions to aid workers whose finances have been hit due to AI disruptions. It says such institutions will help people maintain a standard of living during the transition period, and protect India’s social fabric.
The Economic Survey talks about ‘stewarding institutions’ that will be “designing an approach that delicately balances public welfare without stifling innovation”. These institutions will also see “the right levels of transparency and accountability in AI applications”.
This year’s Economic Survey came even as China edged past the US with its cheaper DeepSeek R1 AI. The announcement of the China-developed large language model (LLM) shook global stock markets.
On its part, India in March announced a $1.25-billion investment in AI. The IndiaAI Mission will enable funding of AI startups and help develop their own AI infrastructure.
The Economic Survey talks about the physical infrastructure, like land and reliable chip supply, and quality data as the lifeblood of AI development.
It says India’s predominantly service-driven economy, coupled with a young and dynamic population, gives it an opportunity to leverage the benefits of AI technologies. So, Economic Survey 2024-25 doesn’t just flag that millions of jobs are at risk due to AI disruptions, it talks about the sectors, and offers ways to transition workers to emerging industries.
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