Economic Survey Highlights AI's Impact on India's Job Market and Future Growth

Economic Survey 2024: AI's impact on job market will be a key factor for future growth, states Economic Survey

The Economic Survey 2023-24 released on Monday considers the pace of technology developments, especially those in the field of Artificial Intelligence (AI), to be among the key determinants of India's medium-term economic growth and says that AI's uncertainty on jobs will be a hindrance to India's progress. "Technology is emerging as the biggest strategic differentiator determining the economic prosperity of nations. Its productivity enhancing potential is beyond doubt but the social impact of emerging technologies such as Artificial Intelligence (AI) via 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," the Economic Survey said. The government's comments on AI impact on the labour market comes at a time when the Survey projects a need to generate an average of nearly 78.5 lakh jobs annually until 2030 (in the non-farm sector) to cater to the rising workforce. The Survey argued that despite all its benefits, AI's impact on workers across all skill levels is uncertain, and this will create barriers for India to sustain high growth rates. "Overcoming these requires a grand alliance of union and state governments and the private sector," it added. Without laying down specific solutions, the Survey added that the job market must adapt while leveraging the tech towards collective welfare measures. It suggested employees and job seekers to develop skills such as analytical thinking, innovation, complex problem solving, technology design and programming, and resilience and adaptability. In his note accompanying the Survey, the chief economic advisor V Anantha Nageswaran said that the corporate sector has a responsibility "to think harder about ways AI will augment labour rather than displace workers." He noted that hiring in the IT sector has slowed significantly in the last two years, and "deploying capital-intensive and energy-intensive AI is probably one of the last things a growing, lower-middle-income economy needs." "It is how we use the technology- whether we use it for automation, surveillance and control or we use it for informed decision making, problem-solving and augmentation- that decides whether AI will facilitate the path of job creation or will be a hindrance to it," the Survey read. SHARE Copy linkEmailFacebookTwitterTelegramLinkedInWhatsAppRedditPublished on July 22, 2024

Economic Survey highlights AI's potential and challenges to future of work in India

According to the Economic Survey 2023-2024, the job market in India is being rapidly transformed by AI, IoT, and advanced technology, presenting both opportunities and challenges. While AI could boost productivity, it can also disrupt jobs.The world is in the midst of a fourth industrial revolution, which is characterised by novel ways in which technology is getting embedded within societies. In the backdrop of this revolution, the future of job markets in India is undergoing a significant transformation, said the Economic Survey 2023-2024. According to the survey tabled by Finance Minister Nirmala Sitharaman in Parliament on Monday, industrial processes across the globe are being redefined by various advanced technologies including IoT, big data, nano-technology, machine learning, AI, blockchains, genetic engineering, quantum computing, advanced analytics, automation and advanced manufacturing technology. The increase in technological advancements is creating a greater need for professionals skilled in areas like big data, AI, machine learning, cybersecurity and cloud computing. The survey said that the biggest disruption of 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. While AI has considerable potential for boosting productivity, the survey cautioned industry stakeholders that it also has the potential to disrupt employment in certain sectors. "India, with its vast demographic dividend and a very young population, is uniquely situated as AI poses both risk and opportunity," said the survey. According to AR Ramesh, CEO, TeamLease Degree Apprenticeship, as artificial intelligence (AI) and automation increasingly transform industries, productivity remains a fundamental challenge for the workforce. However, AI will enhance efficiency and effectiveness across various sectors. "The future of jobs will hinge on skill-based education and the integration of these technologies. To leapfrog into this new era, India must blend the confluence of skills and education, emphasising the development of creativity, critical thinking, problem-solving and complex communication skills that augur well with AI's capabilities," Ramesh said, stressing that the education system must evolve to provide students with both technical and soft skills. Given the affinity of India's population to work with technology, proactive interventions by the government and industry can position India as a key player in the AI age, the economic survey stated, adding employees or job seekers would need skills beyond communication, collaboration, and presentation, such as analytical thinking and innovation. However, according to Teamlease's Ramesh, while AI will automate certain roles, it will also create new opportunities in fields such as AI system design, data analysis, cybersecurity, machine learning, and technology implementation, along with roles in maintenance, oversight and user support. Ramesh opines India's focus on sustainability will drive demand for "green jobs" in renewable energy, green infrastructure, and environmental conservation, as well as sunrise sectors like drones, solar technology, and electric vehicles. By prioritising skill-based education and investing in human capital, he adds India can ensure a workforce that is agile, skilled and poised to capitalise on the transformative opportunities presented by AI and automation. Echoing a similar view, Manoj Nair, Head of Global Delivery Centres, Fujitsu, said, "With close to 25% of the global workforce coming from India over the next decade, skill development and empowerment should be a strategic imperative. A skilled workforce is crucial for economic development. As technology rapidly advances, we need to prepare young people with a mix of education and skills to help meet the needs of our economy. Now is the time to bolster digital literacy by establishing dedicated centres of excellence. Another area that calls for a greater emphasis is research and development (R&D) initiatives, elevating AI use cases and intellectual property creation. By accelerating AI innovation, we can enhance the country's technology development ecosystem."

Will AI lead to job cuts in India? Economic Survey warns these sectors

As AI systems become smarter and more prevalent, the future of work will change significantly, said the economic survey prepared under the guidance of chief economic advisor V Anantha Nageswaran. "While AI has considerable potential for boosting productivity, it also has the potential to disrupt employment in certain sectors," it added. ALSO READ- PM Modi's 'Amrit Kaal' growth strategy in Economic Survey: These are 6 key focus areas If Generative AI significantly boosts the marginal productivity of labour in the right sectors, it can increase labor demand in non-automated tasks or industries producing complementary products. Automation can create new tasks and enhance productivity in new areas. However, the economic survey report added that political decisions are key to ensuring technology benefits everyone. 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 hoped. ALSO READ: Economic Survey LIVE updates Attributing other research, Economic Survey 2023-24 notes that: 1. Manufacturing Sector and AI: The manufacturing sector is less affected by AI because industrial robots are not as flexible or cost-effective as human labour. 2. AI in Inventory and Supply Chain: AI in inventory and supply chain management is more likely to complement human labour rather than replace it. 3. BPO Sector at Risk: The BPO sector is particularly vulnerable, with generative AI revolutionising routine cognitive tasks through chatbots, potentially leading to significant job declines over the next decade. 4. AI in Healthcare, Weather, and Education: AI can bridge development gaps by identifying health risks from digital health data, predicting weather, and assisting teachers in grading and translating texts. 5. AI in the Services Sector: Widespread AI adoption in the services sector could significantly reshape or even replace jobs. ALSO READ- PM Narendra Modi slams Opposition before Parliament Budget Session: 'They tried to not let me...' Given India's tech-savvy population and strong digital infrastructure, proactive efforts by the government and industry can make India a key player in the AI age, the economic survey stated. However, it added, that workers and job seekers will need skills beyond basic communication and collaboration. These include analytical thinking, innovation, complex problem-solving, critical thinking, continuous learning, technology design, programming, and resilience to thrive in the AI-driven future.

Budget 2024: Economic Survey warns about AI's impact on Indian job market - Times of India

Finance Minister Nirmala Sitharaman is set to present the Union Budget 2024 in the Parliament on July 23. As India braces for the Union Budget 2024, the government has highlighted a looming threat: the potential disruptive impact of artificial intelligence (AI) on the country's job market. The government has issued a warning that AI's influence may create major challenges for workers across all skill levels and hinder sustained economic growth.The upcoming budget is expected to address this pressing issue and outline strategies to mitigate the negative consequences of AI while harnessing its potential benefits. Economic Survey highlights AI's impact on Indian job market The recent Economic Survey 2023-24 stated: "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. 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. While AI has considerable potential for boosting productivity, it 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." How the Economic Survey advises govt to tackle this AI 'problem' The Survey said: "India, with its vast demographic dividend and a very young population, is uniquely situated as AI poses both risk and opportunity. According to Capital Economics (2024), the current diffusion and adaptation of AI in India remains low compared to the US, Europe, and the developed Asian economies. The 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, the gradual diffusion of AI is expected to augment productivity. The use of AI to identify health risks out of digitalised health data, predict weather and complement teachers in grading tests and translating texts are some of the development gaps that AI can plug. Widespread adoption of AI across the services sector can significantly reshape and even replace jobs. Based on job posting data from India's largest job website, Copestake, A. et. al. (2023) interpret a near-exponential increase in the demand for AI-related skills since 2016. They find that the demand for AI skills by businesses has a negative impact on the need for non-AI roles and on the top percentile of wages, due to the displacement of high-skilled, managerial positions and non-routine, intellectual tasks. 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. Employees or job seekers would need skills beyond communication, collaboration, and presentation, such as analytical thinking and innovation complex problem solving, critical thinking; learning and self-development; technology design and programming; and resilience and adaptability, to face the AI challenge. AI has made significant growth in the agri-tech, industry & automotive, healthcare, BFSI and retail sectors in India. One of the significant examples is Praman Exchange, the world's largest horticulture exchange, powered by Intello Labs which uses computer vision to map the quality of horticulture products. Pramaan's technology achieves quality assessment with 95 per cent accuracy, surpassing the manual assessment rate of 70 per cent. This gives the contractors the required time and flexibility to trade from anywhere in the world. The Government has launched several initiatives to ensure an AI-enabled ecosystem and to connect AI to the youth of the country. Some of these include 'Future Skills Prime', 'YUVAi: Youth for Unnati and Vikas with AI' a national programme for school students and 'Responsible AI for Youth 2022'45. A budget of Rs 10,300 crore has been provided in 2024 for the India AI Mission, a significant move to strengthen the AI ecosystem." The TOI Tech Desk is a dedicated team of journalists committed to delivering the latest and most relevant news from the world of technology to readers of The Times of India. TOI Tech Desk's news coverage spans a wide spectrum across gadget launches, gadget reviews, trends, in-depth analysis, exclusive reports and breaking stories that impact technology and the digital universe. Be it how-tos or the latest happenings in AI, cybersecurity, personal gadgets, platforms like WhatsApp, Instagram, Facebook and more; TOI Tech Desk brings the news with accuracy and authenticity.