Economic Survey warns AI may displace jobs for middle, lower-income workers
PTC Web Desk: The Economic Survey, presented by Finance Minister Nirmala Sitharaman on Friday, has raised significant concerns regarding the widespread adoption of Artificial Intelligence (AI) in India. While AI promises to transform industries by automating vast sectors of economically valuable work, it also poses potential risks, particularly for the country's middle and lower-income workers.
AI is predicted to surpass human decision-making capabilities in critical sectors, including healthcare, education, business, research, criminal justice, and financial services. However, this leap in technology could lead to large-scale labour displacement, especially for people in lower-wage roles, as companies increasingly replace human workers with more cost-efficient AI systems.
Drawing parallels with past industrial revolutions, the Economic Survey echoes concerns that the impact of AI may not be far different from previous technological shifts. These past revolutions have been characterised by economic hardships, prolonged unemployment for displaced workers, and growing income inequalities, according to Andrew Haldane, former Chief Economist of the Bank of England.
For a service-driven economy like India, with a significant portion of the IT workforce engaged in low-value services, the fear of job loss due to AI automation is very real. India's policymakers must therefore take proactive measures to mitigate the negative consequences of AI adoption and ensure inclusive growth.
The Survey emphasises the need for robust institutions to help the Indian workforce transition from low-skill to medium- and high-skill jobs. This would ensure that AI complements human effort, rather than replacing it entirely. However, developing the social infrastructure necessary for this transition will require substantial resources and time.
Despite these challenges, India benefits from the fact that AI is still in its early stages. The country has a window of opportunity to strengthen its foundations and build the necessary institutions. With a young, dynamic, and tech-savvy population, India is poised to create a workforce capable of using AI to enhance productivity and efficiency across various sectors.
The Economic Survey also suggests that "Augmented Intelligence" – a model where human and machine capabilities work together – could drive the future of work. This approach not only boosts productivity but also has the potential to increase the employment-to-population ratio, as seen during previous periods of automation.
- With inputs from agencies