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Journalism of Courage
Arguing that India’s workforce in low-skill and low-value-added services remains vulnerable to artificial intelligence (AI), the Economic Survey 2024-25 called for the creation of “robust institutions,” which could help transition workers to medium- and high-skilled jobs, where AI can augment their efforts rather than replace them.
“Although the impact of AI on labour will be felt across the world, the problem is magnified for India, given its size and its relatively low per capita income,” the Survey said.
The Survey proposed the concept of “stewarding institutions,” which would be “agile, crosscutting across sectors and up to date on the latest developments, so that they are equipped to identify both opportunities and threats. Stewarding institutions will have to be responsible for designing an approach that delicately balances public welfare without stifling innovation”.
It clarified that stewarding “does not imply placing restrictions on innovation or dictating a narrow set of applications for technology,” but means that policymakers should “demonstrate a certain degree of cognisance when it comes to emerging technologies, so that when the need arises, they stand well-placed to mitigate any adverse effects that emerge as by-products of technological applications”.
Regulatory frameworks will need to be revisited and amended to ensure that the use of AI aligns with societal values, balancing innovation with accountability and transparency, the Survey said. “However, regulations will go only thus far.”
In chapter 13, titled ‘Labour in the AI era: Crisis or catalyst?’ the Survey said that the corporate sector has to display a high degree of social responsibility.
“If companies do not optimise the introduction of AI over a longer horizon and do not handle it with sensitivity, the demand for policy intervention and the demand on fiscal resources to compensate will be irresistible,” it said.
“A robust future roadmap must prioritise industry-academia partnerships, continuous skill development, and flexible learning models to create a globally competitive workforce. Several key areas require focused attention and strategic intervention to achieve this vision of a robust skilling ecosystem,” it added.
Arguing that each revolution has displaced large segments of the workforce and led to economic disparity, the Survey said that “protracted labour displacement is something that a labour-surplus country like India cannot afford”.
“Our primary challenge is the challenge of numbers. As highlighted in the Economic Survey 2023-24, India would have to create an average of 78.5 lakh jobs annually in the non-farm sector by 2030 to cater to the rising workforce. Further, India is a majorly services driven economy, with a significant share of the I.T. workforce employed in low value added services. Such jobs are the most susceptible to automation, as firms in a bid to cut costs may substitute labour for technology,” the Survey said.
“India is also a consumption based economy, thus the fall in consumption that can result from the displacement of its workforce is bound to have macroeconomic implications. If the worst-case projections materialise, this could have the potential to set the country’s economic growth trajectory off course,” it added.
Looking ahead, the Survey said, the country’s predominantly services-driven economy, coupled with its young and dynamic population, offers a fertile ground for leveraging the benefits of emerging technologies, only if proactively and carefully managed.
