AI's Impact on Employment: Economic Survey Highlights Uncertainty and Challenges

AI can disrupt employment, casts a 'huge pall of uncertainty' on jobs: Economic Survey - Times of India

NEW DELHI: The advent of Artificial Intelligence (AI) casts a "huge pall of uncertainty" when it comes to jobs, considering its impact on workers across all skill levels - low, semi and high, the Economic Survey has said. "The biggest disruption for the future of work is the accelerated growth in AI, which is poised to revolutionise the global economy.India would not remain immune to this transformation." Taking a note of the growing concerns around the impact of AI on employment, the Survey conceded that the technological leap has the potential to disrupt growth, and thus it requires a concerted effort between the centre, states, and even corporates to minimise disruptions. "These will create barriers and hurdles to sustained high growth rates for India in the coming years and decades. Overcoming these requires a grand alliance of union and state governments and the private sector." To protect jobs, there is a need to quickly adapt to the advancements. "With AI taking roots in several spheres of economic activity, job market must adapt while steering the technological choices towards collective welfare is key," the survey said. It said that that while AI has a considerable potential for boosting productivity, it can also "disrupt employment" in certain sectors. "As AI systems continue to get smarter and adoption increases, the future of work will be reshaped... Routine tasks, including customer service, will likely witness a high degree of automation; creative sectors will see extensive usage of AI tools for image and video creation; personalised AI tutors can reshape education and sectors like healthcare can witness accelerated drug discovery." The survey also said that India's services exports -- primarily the BPO sector -- could be badly hit due to the advent of AI, and thus companies should devise strategies to tackle the reversal. "While the boom in telecommunications and the rise of the internet facilitated BPOs, the next wave of technological evolution might bring the curtains down on it. In this milieu, the corporate sector has a responsibility, as much to itself as it is to society, to think harder about ways AI will augment labour rather than displace workers." On the impact of AI in the services sector, the survey said studies suggest it is likely to "restrain the growth opportunities for business services progressively" and, therefore, poses a challenge to long-term sustainability and job creation. The survey, however, noted that even while posing challenges to jobs, AI itself will emerge as an opportunity to create employment. "... India is an attractive destination for AI investment due to its relatively low operating costs and the world's second-largest pool of highly skilled AI, machine learning, and big data workers." The survey also said that India -- with its vast demographic dividend and a very young population -- is "uniquely situated" as AI poses both risks and opportunity. "... the current diffusion and adaptation of AI in India remains low compared to US, Europe, and the developed Asian economies. Manufacturing sector is less exposed to AI as industrial robots are neither as nimble nor as cost-effective as human labour. In inventory and supply chain management, AI applications could rather be complementary to labour. Nevertheless, at particular risk is the BPO sector, where GenAI is revolutionising the performance of routine cognitive tasks through chatbots, and employment in the sector is estimated to decline considerably in the next ten years. In the following decade, however, gradual diffusion of AI is expected to augment productivity." Also, it said that given the affinity of India's population to work with technology, proactive interventions by Govt and industry can position India as a key player in the AI age. The survey questioned the impact of AI on efforts to mitigate climate change, saying it is massively driving up energy consumption in developed economies who generally force developing countries to agree to climate commitments. "On the one hand, developing nations are forcefully nudged to sign up for climate commitments that they are not ready for. On the other hand, the developed world is in a mad 'Scramble for Africa' kind of rush to usher in the latest and the most expansive AI ecosystem. The fact is that AI is an energy guzzler. Even as the data centres are ramping up energy demand, cloud storage facilities, crypto mining, and AI are all expected to increase this exponentially."

AI casts huge uncertainty on jobs - Times of India

The advent of Artificial Intelligence (AI) casts a "huge pall of uncertainty" when it comes to jobs, considering its impact on workers across all skill levels - low, semi and high, says the Economic Survey. "The biggest disruption for the future of work is the accelerated growth in AI, which is poised to revolutionise the global economy. India would not remain immune to this transformation." Taking a note of the growing concerns around impact of AI on employment, the survey said technological leap has potential to disrupt growth and thus it requires a concerted effort among Centre, states and even corporates to minimise disruptions."These will create barriers and hurdles to sustained high growth rates for India in the coming years and decades." To protect jobs, there is a need to quickly adapt to advancements. "With AI taking roots in several spheres of economic activity, job market must adapt, while steering the technological choices towards collective welfare is key." It said while AI has a considerable potential for boosting productivity, it can also "disrupt employment" in certain sectors. "As AI systems continue to get smarter and adoption increases, the future of work will be reshaped... Routine tasks, including customer service, will likely witness a high degree of automation, creative sectors will see extensive usage of AI tools for image and video creation, personalised AI tutors can reshape education and sectors like healthcare can witness accelerated drug discovery." The survey also said India's services exports, primarily the BPO sector, could be badly hit due to the advent of AI, and thus companies should devise strategies to tackle the reversal. "Next wave of technological evolution might bring the curtains down on boom in telecom and rise of internet facilitated BPOs. In this milieu, the corporate sector has a responsibility, as much to itself as it is to society, to think harder about ways AI will augment labour rather than displace workers." On impact of AI in the services sector, the survey said studies suggest it is likely to "restrain the growth opportunities for business services progressively" and, therefore, poses a challenge to long-term sustainability and job creation. The survey, however, noted that even while posing challenges to jobs, AI will emerge as an opportunity to create employment. "... India is an attractive destination for AI investment due to its relatively low operating costs and world's second-largest pool of highly skilled AI, machine learning, and big data workers." India - with its vast demographic dividend and a very young population - is "uniquely situated" as AI poses both risks and opportunity.

Economic Survey | AI casts "huge pall of uncertainty" over jobs

The Economic Survey published on Monday warned against the potential challenge that artificial intelligence could present to the Indian economy saying the "advent of the tech casts a huge pall of uncertainty as to its impact on workers across all skill levels - low, semi and high." The massive changes owing to widespread adoption of AI "will create barriers and hurdles to sustained high growth rates for India in the coming years and decades." The report recognised that while AI could boost productivity, its disruptive powers couldn't be undermined. It highlighted routine tasks like customer service, "which will likely witness a high degree of automation," the usage of AI tools in the creative industries, personalised AI tutors in education and AI-related drug discoveries in healthcare. The report also noted that as AI was quickly becoming a general-purpose technology as often used as electricity and the internet, it was emerging as a "strategic differentiator determining the economic prosperity of nations." Govt. worried about job losses due to AI, yet comforted by reskilling prospects: MeitY secy. Additionally, there was a danger that AI could skew the capital and labour shares of income in favour of the former. (For top technology news of the day, subscribe to our tech newsletter Today's Cache) According to the survey, AI could also prove to be a setback for climate goals of developed countries which are ramping up efforts of building large language models or LLMs that consume huge amounts of power. Citing a Goldman Sachs report from April, the document shared that AI could become "one of the major bottlenecks for clean energy transition, and the addition of data centres and AI could exacerbate this". On the other side, the survey acknowledged the AI-related Foreign Direct Investments or FDI that had flown into the country in 2022. A NASSCOM study had called India an attractive region for AI investments due to its relatively low operating costs and the world's second-largest pool of highly skilled AI, machine learning, and big data workers. Earlier in February this year, Tomer Cohen, chief product officer of LinkedIn had shared that AI could impact over half of Indian jobs. He added that Indian professionals were using their AI skills three times more than the global average. Read Comments

The Big Challenge: AI must reboot, not delete, jobs

As per the Survey, tabled by finance minister Nirmala Sitharaman in Parliament, there remain long-existing challenges of formalising a burgeoning workforce, facilitating job creation in sectors which can absorb workers shifting from agriculture, and ensuring social security benefits for those in regular wage and salaried employment.Deploying capital-intensive and energy-intensive artificial intelligence (AI) is probably one of the last things a growing, lower-middle-income economy needs, said the Economic Survey. The corporate sector, it said, has a responsibility, as much to itself as it is to society, to think harder about ways AI will augment labour rather than displace workers. "The advent of artificial intelligence casts a huge pall of uncertainty as to its impact on workers across all skill levels - low, semi and high," the Survey said on Monday. "These will create barriers and hurdles to sustained high growth rates for India in the coming years and decades." Sarayu Natarajan, founder of Aapti Institute, said the Survey acknowledges a key insight of the research community--that the gains of AI for India will be hollow if the future of work is not actively looked into. "AI presents India's opportunity to gain big for its people if we solve for human capacity, compute and data, while paying attention to gainful employment," she said. "Interestingly, the survey also notes the need for nearly 80 lakh (8 million) workers in non-farm areas. Proactive efforts for re-skilling workers towards these jobs, supported by policy measures for welfare and financial security of all are of immediate importance." The Survey said that the Indian economy needs to generate an average of nearly 7.85 million jobs annually until 2030 in the non-farm sector to cater to the rising workforce. As per the Survey, tabled by finance minister Nirmala Sitharaman in Parliament, there remain long-existing challenges of formalising a burgeoning workforce, facilitating job creation in sectors which can absorb workers shifting from agriculture, and ensuring social security benefits for those in regular wage and salaried employment. It said there is scope to supplement the existing schemes of production-linked incentive (PLI) (60 lakh employment generation over 5 years), MITRA textile scheme (20 lakh employment generation), MUDRA, etc., while boosting their implementation. "But given the affinity of India's population to work with technology, as seen with the digital public infrastructure, proactive interventions by the government and industry can position India as a key player in the AI age," the Survey said. Neeti Sharma, CEO of TeamLease Digital, said the Survey highlighted the fact that the Indian labour market is undergoing a transformative shift with rapid adoption of AI-driven technologies. "AI and automation will require 16.2 million workers in India to reskill and upskill, while also creating 4.7 million new tech jobs," she said. "To stay ahead of the curve, it is crucial for both the workforce and businesses to embrace continuous learning and upskilling." As per the Survey, a particular risk is the BPO sector, where GenAI is revolutionising the performance of routine cognitive tasks through chatbots, and employment in the sector is estimated to decline considerably in the next 10 years. Sameer Dhanrajani, chief executive officer of AI advisory and consulting firm AIQRATE, said it is an opportune time for the BPO sector to adopt rather than succumb. "The question really is not that those professionals will lose jobs. I think the real opportunity for Indian BPOs is to internalise AI as it will boost business metrics. It will offer even better commercial viability with the net prices per call, per task decreasing as AI improves your productivity," he explained. "AI today does not do 100% of any human activity, you need humans in the loop. So with the human-in-the loop model, if the BPO industry adopts, it should be able to increase productivity and ultimately get more market share." Rahul Agarwalla of AI fund SenseAI, too, said there is a need to look at AI as an enabler that caters to underserved markets rather than a job snatcher. "If the goal, for instance, is to raise the gross enrollment ratio in higher education to 50%, if you calculate the number of teachers and campuses it requires, the numbers are mind-boggling. To expect us to be able to create that many teachers and that many colleges is just not going to happen. The only solution is technology and AI," he said. The Survey also pointed out the pitfalls of AI in terms of environmental impact. It said the West put little thought in sustainable growth of AI, making it what it termed 'tech's Bakasur' (Indian mythology character symbolising limitless hunger and greed), which is leading to huge environmental repercussions due to energy consumption. "Data centres and AI infrastructure require significant power, which could lead to higher carbon footprints if not managed sustainably," TeamLease Digital's Sharma said. "This necessitates a balanced approach that includes investment in green technologies and renewable energy sources to mitigate environmental impact."

Economic survey flags impact of AI on workers, puts onus on private sector to create jobs

The Economic Survey highlights the adverse impact that artificial intelligence (AI) can have on Inda's working class which, in turn, can add to the barriers to sustained growth for the economy. The survey also turns the spotlight on the private sector to come up with ways to augment labour with the help of AI rather than displace jobs. "The advent of Artificial Intelligence casts a huge pall of uncertainty as to its impact on workers across all skill levels -- low, semi and high," the survey said, noting it as one of the potential shocks that can further structurally impair employment generation and create barriers and hurdles to sustained high growth rates for India in the coming years and decades. The other shocks can be climate change and global warming, the survey said, while also noting the larger shocks that came from high corporate indebtedness and the covid pandemic which had throttled job creation. "Overcoming these requires a grand alliance of Union and state governments and the private sector," the survey highlighted. "The corporate sector has a responsibility, as much to itself as it is to society, to think harder about ways AI will augment labour rather than displace workers," it added. In his comments at the press conference, chief economic advisor V. Anantha Nageswaran said that India needed to create about 8 million jobs every year and in that context corporate India had to make sure that the deployment of technology does not hurt the labor share of income and the capital share of income. This, he said, was a medium-term challenge. "India may have a slight short term negative impact followed by a medium term positive impact, therefore it is necessary for the Indian corporate sector both information technology and all IT sector to find the right balance between deployment of technology and deployment of labour because without labour income and without labor employment, that is no demand growth, which means it comes back to hurt the country's top line and bottom line as well," he said. Pointing to findings from the Staff Discussion Note of the International Monetary Fund published in June 2024 that talk of profound concerns stemming from Generative Artificial Intelligence, or GenAI's, impact on massive labour disruptions and inequality, the survey said that it would be in the 'self interest' of corporate India to seriously create jobs even as they invest in AI across sectors. "... employment is about dignity, self-worth, self-esteem, self-respect, and standing in the family and community, not just about the income it brings. That is why it is in the enlightened self-interest of the Indian corporate sector, swimming in excess profits, to take its responsibility to create jobs seriously. Of course, it must find people with the right attitude and skills," it added. The survey also said that the services sector should focus on human capital to take advantage of the agglomeration effects of large, well-functioning cities that are critical for the growth of services, especially those with global market potential. Flagging the possibility of business processing outsourcing or BPO jobs such as medical transcription, image creation animation, et al, being lost to AI in the coming years and the significantly low hiring in the IT sector in the last two years, the survey pointed to the unclear picture of overall corporate hiring on a regular basis and hence cautioned against blind deployment of capital and energy intensive AI which will in turn hurt job creation. "We do not have a full picture of overall corporate hiring in the country on a regular basis. In any case, deploying capital-intensive and energy-intensive AI is probably one of the last things a growing, lower-middle-income economy needs," it added. Terming technology as an emerging biggest strategic differentiator which was also determining the economic prosperity of nations, the survey admitted that AI had immense productivity enhancing potential but its social impact through labour market disruptions and labour displacement was not yet understood. "It also has the potential to skew the capital and labour shares of income in favour of the former," it noted. To be sure, the chief economic advisor said that an upside existed in the high-end jobs where AI could provide value addition.

Economic Survey underscores dangers of AI for future workforces

India needs to create 7.85 million non-farm jobs every year until 2030 to absorb its growing workforce amid new challenges such as artificial intelligence (AI), which could prove to be the "biggest disruption for future work", the Budget-eve Economic Survey 2023-24, tabled in Parliament on Monday, said. Adoption of AI is transforming the job market and India will not "remain immune to this transformation", the survey said, calling for the government and the private sector to come together in a "grand alliance" to leverage such technology to reshape jobs, not replace them. "Artificial Intelligence casts a huge pall of uncertainty as to its impact on workers across all skill levels - low, semi and high," the review, authored by researchers, led by chief economic advisor V. Anantha Nageswaran, stated. The review said AI technologies could even create barriers and hurdles to sustained high growth rates for India. According to an International Monetary Fund study, nearly 40% of current jobs will be exposed to AI globally. The study, quoted by the review, found that employment highly exposed to AI in India stood at 26%. Citing a survey of 33000 firms, the review said corporate profits had "quadrupled" between FY20 and FY23 but they had not created enough jobs. "Hiring and compensation growth hardly kept up with it." India's unemployment rate declined to 3.2% in 2022-23, along with rising youth and female participation in the workforce, the review stated. It noted a surge in agricultural employment, partly explained by reverse migration to villages during the pandemic. According to the review, the government's annual and quarterly periodic labour force surveys (PLFS) show the country's annual unemployment rate for persons aged 15 years and above by usual status or US, has been declining since the pandemic. US is a reference period during which if person is engaged in an economic activity for 30 days in the last 365 days preceding the survey, he or she is considered employed. Citing the most recent PFLS, the review said the quarterly urban unemployment rate for people aged 15 years and above declined to 6.7% in the quarter ending March 2024 from 6.8% during the same period of the previous year. The decline has been accompanied by increased worker population ratio, or the number of employed persons, and the labour force participation rate, which is the percentage of people employed as well as those looking for jobs. To be sure, private-sector estimates of unemployment levels in the world's fastest growing economy vary widely from the PLFS brought out by the statistics ministry. According to the data firm, Centre for Monitoring the Indian Economy, the country's jobless rate was 9.2% in June 2024. The survey said the care economy and food processing were two sectors with high job-creation potential. "To generate and sustain quality employment, agro-processing and care economy are two promising candidates, the latter also being a necessity for levelling the playing field for women in labour market." To meet the demand of 7.85 million jobs per year, there is "scope to supplement existing schemes", such as production-linked incentives, which could yield 6 million jobs over five years and the MITRA textile scheme, which could create 2 million employment generation, the survey said. "The lack of availability of timely data on the absolute number of (formal and informal) jobs created even at annual intervals, let alone at higher frequencies, in various sectors - agriculture, industry including manufacturing and services - precludes an objective analysis of the labour market situation in the country," the review said.

AI impact on workforce risk to sustained high growth

Manufacturing sector is less exposed to AI as AI-powered industrial robots are neither as nimble nor as cost-effective as human labour. With the rise in artificial intelligence (AI) adoption, the number of jobs in India's BPO sector is set to go down drastically, said the Economic Survey 2023-24 presented by the finance minister Nirmala Sitharaman on Monday. The survey said that the impact of AI on the jobs market will vary. For instance, the manufacturing sector is less exposed to AI as AI-powered industrial robots are neither as nimble nor as cost-effective as human labour. On the other hand, in the inventory and supply chain management, AI applications could rather be complementary to labour. On the other hand, the survey said that the Indian economy needs to generate an average of nearly 7.85 million jobs annually until 2030 in the non-farm sector to cater to the rising workforce. To meet the demand of 7.85 million jobs in the non-farm sector per year, there's a scope to supplement the existing schemes of PLI (6 million employment generation over 5 years), MITRA textile scheme (2 million employment generation), MUDRA, etc., the survey mentioned. The survey pointed out that the BPO sector is at particular risk, where GenAI is revolutionising the performance of routine cognitive tasks through chatbots, and employment in the sector is estimated to decline considerably in the "next ten years". More importantly, the survey said that the uncertainty around AI and its impact on the job market could create hurdles to India's sustained high growth rates in the coming years. Citing an IMF study, the survey said that 26% occupations in India are exposed to AI with 14% occupations complementing more with AI. Experts said that since AI is fast evolving, its impact on different professions is being constantly evaluated. "While it will redefine work, AI won't wipe out entire industries. Human creativity and judgement will always be essential. With generative AI emerging, we are closely watching its impact on various professions," said Sashi Kumar, head (sales) at Indeed India. Beyond job creation, the survey noted that the quality of employment and social security have their own significance. "The rising employment of flexi workers through staffing companies can be a channel for ensuring social security for informal workers," the survey said. The survey, however, mentioned between 2013-14 and 2021-22, the total number of factory jobs grew annually by 3.6%. In absolute numbers, employment in Indian factories has grown from 10.4 million to 13.6 million in this period. The survey highlighted, citing data from the Annual Survey of Unincorporated Enterprises for 2022-23, that overall employment in these enterprises fell from 111 million in 2015-16 to 109.6 million in 2022-23. "There was a reduction of 5.4 million workers in manufacturing but the expansion of the workforce in trade and services gained in jobs limited the overall reduction in the number of workers in unincorporated enterprises to around 1.65 million between these two periods," said the economic survey.

AI casts huge pall of uncertainty over impact on workers across skill levels: Economic Survey - ET Telecom

New Delhi: The Economic Survey on Monday said the advent of Artificial Intelligence (AI) casts a "huge pall of uncertainty" with regard to impact on workers across all skill levels. The Economic Survey 2023-24 tabled in Parliament predicted that the new-age technology, while turbocharging productivity, has the potential to disrupt employment in certain sectors. The Survey described AI as "phenomenal in its rapid pace of innovation and ease of diffusion" but also cautioned that the the future of work will be reshaped by it. "... The advent of Artificial Intelligence casts a huge pall of uncertainty as to its impact on workers across all skill levels -- low, semi and high," it said. The biggest disruption for the future of work is the accelerated growth in AI, which is poised to revolutionise the global economy, the Survey noted. "India would not remain immune to this transformation. AI is being recognised as a general-purpose technology, like electricity and the internet, which is phenomenal in its rapid pace of innovation and ease of diffusion. As AI systems continue to get smarter and adoption increases, the future of work will be reshaped," it said. The Survey said AI has considerable potential for boosting productivity, but "also has the potential to disrupt employment in certain sectors". "Routine tasks, including customer service, will likely witness a high degree of automation; creative sectors will see extensive usage of AI tools for image and video creation; personalised AI tutors can reshape education and sectors like healthcare can witness accelerated drug discovery," it said.

AI casts huge pall of uncertainty over impact on workers across skill levels: Economic Survey | Business Insider India

The on Monday said the advent of (AI) casts a "huge pall of uncertainty" with regard to impact on across all . The Economic Survey 2023-24 tabled in Parliament predicted that the new-age technology, while turbocharging productivity, has the potential to disrupt employment in certain sectors. The Survey described AI as "phenomenal in its rapid pace of innovation and ease of diffusion" but also cautioned that the the will be reshaped by it. "... The advent of Artificial Intelligence casts a huge pall of uncertainty as to its impact on workers across all skill levels -- low, semi and high," it said. The biggest disruption for the future of work is the accelerated growth in AI, which is poised to revolutionise the global economy, the Survey noted. "India would not remain immune to this transformation. AI is being recognised as a general-purpose technology, like electricity and the internet, which is phenomenal in its rapid pace of innovation and ease of diffusion. As AI systems continue to get smarter and adoption increases, the future of work will be reshaped," it said. The Survey said AI has considerable potential for boosting productivity, but "also has the potential to disrupt employment in certain sectors". "Routine tasks, including customer service, will likely witness a high degree of automation; creative sectors will see extensive usage of AI tools for image and video creation; personalised AI tutors can reshape education and sectors like healthcare can witness accelerated drug discovery," it said. SEE ALSO: Google Pixel 9 Pro Fold to launch in India on August 14 alongside the Pixel 9 series OnePlus Nord 4 vs Realme GT 6T - which mid-range phone should you buy under ₹35,000? Reliance Jio and Airtel added 3.45 million subscribers in May 2024, while Vi lost nearly a million

Worried about AI eating up your jobs? So is India's Finance Ministry

The Economic Survey FY24, prepared by the Department of Economic Affairs, warns that artificial intelligence could impact workers across all skill levels, hindering India's economic growth. It calls for collaboration between governments and the private sector to overcome these challenges, highlighting AI's potential to disrupt labor markets, skew income distribution, and restrain business growth opportunities.The Economic Survey FY24, prepared by the Department of Economic Affairs, cast worries over artificial intelligence possibly impacting workers across skillsets and thereby affecting India's economic growth rate. "The advent of Artificial Intelligence casts a huge pall of uncertainty as to its impact on workers across all skill levels - low, semi and high," the Survey said. "These will create barriers and hurdles to sustained high growth rates for India in the coming years and decades. Overcoming these requires a grand alliance of union and state governments and the private sector," the authors added. This comes at a time when artificial intelligence, touted as the next big thing in the field of technological development, has changed the way certain businesses work in many different ways. For organisations, the prospect of higher productivity through the use of AI is quite appealing. It also comes at a time when private players are lamenting the shortage of skilled workers across India's working population. Citing recent hiring trends in India across sectors, the Economic Survey flagged that "deploying capital-intensive and energy-intensive AI is probably one of the last things a growing, lower-middle-income economy needs." From the medium-term perspective, the Survey noted that the social impact of emerging technology like AI through labour market disruptions and labour displacement is barely understood. "It also has the potential to skew the capital and labour shares of income in favour of the former," it said. "Studies suggest that the application of AI is likely to restrain the growth opportunities for business services progressively and, therefore, poses a challenge to long-term sustainability and job creation," the Survey added.

AI Advancement Likely To Result In Job Losses Across All Skill Levels : Economic Survey

The rise of AI casts huge uncertainty as to its impact on workers across skill levels, which can lead to barriers for sustainable growth of the Indian economy, the Survey said It further emphasised that overcoming these challenges will require a joint effort by the central and state governments as well as the private sector Further, the Economic Survey also put the onus on the corporate sector to explore ways in which AI can augment labour instead of displacing jobs

Don't forget employment responsibility over AI fascination: CEA to businesses

The Economic Survey, placed in Parliament on Monday, mentioned the impact of automation on workers as "complex and uncertain", and suggested India invest in research to "steer the AI bandwagon towards shared prosperity". The Survey's lead author, India's Chief Economic Advisor V. Anantha Nageswaran also emphasized that businesses have an obligation to strike a balance between deployment of capital and labour. 'Lack data on labour' Mr. Nageswaran pointed to the lack of availability of timely data on absolute number of (formal and informal) jobs created in various sectors that precludes an objective analysis of the labour market. Countering the charges that unemployment is a structural issue he said that the present situation is due to multiple factors like the COVID-19 pandemic, adding that it is difficult to conclude that the Indian economy's ability to create employment is structurally impaired. "Nonetheless, going forward, the task is cut out," he added. The CEA said India is uniquely situated as AI poses both risks and opportunities. "Widespread adoption of AI across the services sector can significantly reshape and even replace jobs," he said. As jobs are created in the private sector, the CEA noted that India's corporate sector has never had it so good, with profitability at a 15-year high in 2023-24. "Profits had quadrupled between financial year 2019-20 to 2023-23," he said and warned that privileging capital over labour is inimical to long-term growth prospects, adding that in their fascination for AI and fear of erosion of competitiveness, businesses must bear in mind their responsibility for employment generation and the consequent impact on social stability. The Survey stated India's workforce was about 56.5 crore, of which more than 45% are in agriculture, 11.4% in manufacturing, 28.9% in services, and 13% in construction. 'Need non-farm jobs' The CEA also estimated the Indian economy must generate almost 78.51 lakh jobs annually in the non-farm sector to cater to the rising workforce. "However, to create these many jobs, there is a need to create the conditions for faster growth of productive jobs outside of agriculture, especially in organised manufacturing and services, even while improving productivity in agriculture," Mr. Nageswaran added. "While the services sector remains a major job creator, the construction sector has been rising in prominence lately, driven by the government's push for infrastructure. However, since construction jobs are largely informal and low-paid, there is a need for avenues for the labour force leaving agriculture," he said adding that manufacturing sector employment creation has been subdued in the past decade due to the legacy of bad loans and appears to have rebound since 2021-22. He hoped the new Labour Codes would improve the scenario. However, the Codes are yet to be fully operationalised and many states are found to be reintroducing older restrictions under new Laws. "Labour laws need to be reviewed to re-evaluate incentives for employers, with a focus on achieving better outcomes for economic growth and prosperity in the manufacturing sector. Implementing more flexible labour laws could unleash substantial economic potential, promote gender inclusivity, and attract industrial investment," the CEA said. Mr. Nageswaran reckoned the gig workforce to expand to 2.35 crore by 2029-30. "Gig workers are expected to form 6.7% of the non-agricultural workforce or 4.% of the total livelihood in India by 2029-30," he noted. Read Comments

Economic Survey 2024: Govt warns about adverse impact of AI on job market; 'huge pall of uncertainty as to...' | Mint

While touching on the question of artificial intelligence, the economic survey stated, "The advent of Artificial Intelligence casts a huge pall of uncertainty as to its impact on workers across all skill levels - low, semi and high. These will create barriers and hurdles to sustained high growth rates for India in the coming years and decades. Overcoming these requires a grand alliance of union and state governments and the private sector."