The Economic Survey 2023-24 released on Monday considers the pace of technological developments, especially those in the field of artificial intelligence (AI), to be one of the key determinants of India’s medium-term economic growth and says AI’s uncertainty on employment could be a constraint to India’s progress.
“Technology is emerging as the most important strategic driver of nations’ economic prosperity. Its productivity-enhancing potential is undeniable, but the social impact of emerging technologies such as artificial intelligence (AI) through labour market disruption and labour displacement is barely understood. It also has the potential to distort the income shares of capital and labour in favour of the former,” the Economic Survey said.
The government’s comments on the impact of AI on the job market come at a time when the survey projects the need to generate an average of nearly 78.5 lakh jobs per year till 2030 (in the non-farm sector) to meet the growing workforce.
The study highlights that despite all its benefits, the impact of AI on workers of all skill levels is uncertain, which will create hurdles for India to sustain high growth rates. “To overcome these hurdles, there needs to be a great alliance between state and union governments and the private sector,” it adds.
In his note as part of the survey, Chief Economic Advisor V Anantha Nageswaran said the business sector had a responsibility to “think more about how AI could augment the workforce rather than replace it.” He noted that hiring in the IT sector has slowed significantly in the last two years and that “deploying capital- and energy-intensive AI is probably one of the last things a growing lower-middle-income economy needs.”
“For talent to be future-ready, it needs to be adaptable and open to exploring diverse opportunities and upskilling. As the industry faces talent shortages in niche and specialized technologies, investing time and effort in developing unique skills can make talent more attractive to potential employers,” said Milind Shah, Managing Director, Randstad Digital, India.
Munira Loliwala, Vice President, Strategy and Growth, TeamLease Digital, says that job roles will be redefined, not eliminated, with the advent of AI and Generation AI. “AI will further enhance human capabilities. Job losses will be replaced by job cuts that will require reskilling,” she added.
Without offering specific solutions, the survey adds that the labor market must adapt while leveraging technology for collective well-being measures. It suggests that employees and job seekers develop skills such as analytical thinking, innovation, complex problem solving, technology design and programming, as well as resilience and adaptability.
“It is how we use technology – whether we use it for automation, monitoring and control or for informed decision-making, problem-solving and augmentation – that determines whether AI will facilitate or hinder job creation,” the survey said.
