India's diverse economy and demographic advantage offer a unique position to benefit from the rapid advancements in artificial intelligence (AI), according to the Economic Survey for 2024-25 tabled in Parliament on Friday.
However, realizing these advantages requires significant investments in education and workforce development, along with the creation of institutions that can provide necessary support for adapting to technological changes.
The Economic Survey, presented by Finance Minister Nirmala Sitharaman, stated, "These mechanisms can help workers adapt to changing demands while providing essential safety nets."
Despite AI's significant potential, the technology is still in a developmental phase and faces several challenges. While its growth is undeniable, AI has not yet reached the level of widespread adoption seen with technologies like personal computers and the internet.
The Economic Survey, prepared under Chief Economic Adviser Anantha Nageswaran’s leadership, stressed the importance of policymakers considering the evolving nature of AI and its effects on labor markets.
"Historical parallels with earlier technological revolutions reveal the critical role of inclusive institutions in managing disruption and ensuring equitable outcomes," the report said.
The survey also highlighted several barriers to AI's large-scale implementation, such as concerns over reliability, infrastructure deficits, and inefficiencies. As AI’s capabilities grow, so do concerns about its impact on labor markets, particularly in light of recent developments.
The Economic Survey quoted OpenAI’s founder, who predicted the arrival of "AI workers" by the end of 2025. As AI systems become increasingly advanced, they are expected to outperform humans in decision-making roles across sectors like healthcare, criminal justice, business, and finance, which presents both opportunities and challenges.
The Economic Survey emphasized the need for a responsible and balanced approach to AI adoption, particularly in India, where the scale of employment means the impacts will be more pronounced. The chapter on AI also noted a significant shift in public perceptions of the technology, calling for its development to align with societal goals.
The report noted the rise of leading AI companies, including Google (Gemini), Microsoft (Co-Pilot), Meta (MetaAI with Llama), and others, and pointed to the growing global interest in AI. Between 2021 and 2022, AI patents granted worldwide rose by 62.7%, totaling over 62,000 patents, and private investment in generative AI surged from USD 3 billion in 2022 to USD 25.2 billion in 2023.
Corporate investments in AI between 2021 and 2023 reached USD 761 billion globally, with more companies referencing AI in their earnings calls, and CEOs anticipating that AI adoption will reduce labor requirements in various industries.
The Economic Survey's assessment underscores the need for India to strategically navigate the opportunities and challenges presented by AI, ensuring its benefits while mitigating potential disruptions to the workforce.
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