Economic Survey 2024-25: India’s Workforce Vulnerable to AI

Syllabus: GS3/Economy

Context

• 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.

Major Highlights

• The future of work revolves around ‘Augmented Intelligence’, where the workforce integrates both human and machine capabilities.
  • By leveraging its young, dynamic, and tech-savvy population, India has the potential to create a workforce that can utilize AI to augment their work and productivity.
• Raising the Quality: India‘s employment challenge is not of numbers, but also of raising the overall quality of its workforce.
• Service-oriented Economy: India’s economy is heavily service-oriented, with a significant portion of its IT workforce engaged in low-value-added services.
  • These roles are particularly susceptible to automation, and a large segment of the population relies on these jobs for their livelihoods. 
• The challenge lies in ensuring that the benefits of AI do not come at the expense of the workforce, particularly those in vulnerable positions.

Measures to be Taken

• The survey identifies three types of institutions essential for this transition: Enabling Institutions, Insuring Institutions, and Stewarding Institutions. 
  • These entities will help upskill the workforce, preparing them for medium- and high-skill jobs where AI can enhance their capabilities rather than replace them. 
• Social Infrastructure encompassing Enabling Institutions, 
• Insuring Institutions and Stewarding Institutions to help graduate workforce towards medium-and high-skill jobs.
• India will therefore have to fast track the creation of robust institutions through a tripartite compact between the government, private sector and academia.

Challenges

• Practicality and reliability are core issues that need to be addressed by developers. 
• AI also needs significant infrastructure for scaling, which takes time to build. 
• AI models have to target efficiency gains without compromising on performance.

Suggestions

• Policymakers must balance innovation with societal costs, as AI driven shifts in the labour market could have lasting effects. 
• The corporate sector also must act responsibly, handling the introduction of AI with sensitivity to India‘s needs. 
• A collaborative effort between government, private sector, and academia is essential.

The Way Ahead

• AI, currently in its early stages, provides India with the opportunity to tackle challenges, strengthen its foundations, and mobilize a nationwide institutional response.
• 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.
• As India stands on the brink of an AI revolution, the Economic Survey urges policymakers to strike a balance between fostering innovation and addressing societal costs. 

Source: PIB