The impact of AI on labour market is more prominent in India due to it's size and its relatively low per capita income, the Economic Survey 2025 has highlighted. The survey has asserted that if companies do not introduce AI in a responsible and considerate manner—taking into account its impact on jobs, ethics, and society—there will be strong pressure for governments to step in with regulations and policies.
Chief Economic Adviser V. Anantha Nageswaran has also emphasised that the need of the hour is for companies to strategically and efficiently use AI over an extended period to maximise its positive impact on productivity, employment, and economic growth.
If companies do not follow the same, then the state, in turn, has to resort to taxation of profits generated from the replacement of labour with technology to mobilise those resources, adds the survey. As a result, It will leave everyone worse off and the country’s growth potential will suffer, adds the survey.
The same has been mentioned by the International Monetary Fund in its paper titled 'Gen-AI: Artificial Intelligence and the Future of Work' released on January 14, 2024. It indicates that AI adoption could impact global economic inequality.
The survey has also indicated that the country should take advantage of the early stages of AI development to create strong policies and institutions. By doing the same, India will help reduce the potential negative impacts of AI, such as job losses, while maximizing its benefits.
It says, "Utilising this window of time available during the nascent stages of AI to build robust institutions can ensure that we, as a nation, are well placed to minimise the costs as much as possible. This can then help tilt the scale towards the benefits, bringing a balance to the ‘cost-benefit’ aspect in a labour driven, services dependent economy like India."
The survey further adds that for this transformation to happen, participation from all stakeholders becomes pertinent. It adds that for AI driven productivity to increase, the government, private sector and academia has to collaborate together. It says, "A tripartite compact between the government, private sector and academia can ensure that the gains from AI-driven productivity are widely distributed, taking us in the direction of the ideal inclusive growth strategy." The survey further adds that the probability of success in this endeavour depends on "how well we understand its complexity and the serious consequences of failing."
