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AI Threatens Middle and Lower-Income Jobs, Warns Economic Survey (Representative image) (Representative image)
New Delhi: The Economic Survey 2025 tabled by Finance Minister Nirmala Sitharaman highlighted the impact that artificial intelligence will have on the job market. The survey acknowledged that AI usage may lead to the loss of jobs in middle and lower-income employment opportunities.
The widespread adoption of AI across various sectors presents potential risks, especially for middle and lower-income worker, the survey said. As AI technology surpasses human decision-making capabilities, it is expected to replace a significant number of lower-wage jobs, with companies opting for more cost-efficient AI systems over human labour.
āDevelopers of Artificial Intelligence promise to usher in a new age, one where a bulk of the economically valuable work is automated. AI is anticipated to surpass human performance in critical decision-making across various fields, including healthcare, research, criminal justice, education, business, and financial services. This can result in large scale labour displacement, especially at the middle- and lower-quartiles of the wage distribution,” the survey said.
The Survey also highlighted that the negative impacts of AI adoption may mirror those of previous technological shifts. Andrew Haldane, former Chief Economist of the Bank of England, noted that past transitions have been marked by economic hardships, extended unemployment for displaced workers, and widening income inequalities.
āFears of adverse effects of large-scale AI adoption may not seem as far-fetched when viewed in the context of previous industrial and technological revolutions. As illustrated by Andrew Haldane, the former Chief Economist of the Bank of England, previous industrial and technological revolutions have been āpainfulā, characterized by widespread economic hardships, protracted unemployment for those displaced and widening income inequalities,” it said.
The survey stressed on enhancing the skill set of people to ensure that AI further accentuate their performance instead of being replace by it.
āMinimising the negative impacts of creative destruction has always required a collective societal effort, involving the creation of new social infrastructure to promote environments where innovation leads to inclusive growth. India will therefore have to fast track the creation of robust institutions through a tripartite compact between the government, private sector and academia,” it added.
The Economic Survey also proposed that “Augmented Intelligence”āa model combining human and machine capabilitiesācould shape the future of work. This approach not only enhances productivity but also has the potential to raise the employment-to-population ratio, similar to what was observed during previous automation phases.
āLeveraging its young, dynamic, and tech-savvy population, India has the potential to create a workforce that can utilise AI to augment their work and productivity. Thus, Indiaās employment challenge is not just one of numbers, but also one of raising the overall quality of its workforce,” it said.
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