Economic Survey FY24: AI's Impact on India's Workforce and Growth:The Economic Survey FY24, created by the Department of Economic Affairs, raises concerns about artificial intelligence (AI) affecting workers at all skill levels and potentially slowing down India's economic growth. The survey stresses the need for collaboration between governments and the private sector to tackle these challenges, as AI could disrupt labor markets, distort income distribution, and limit business growth opportunities.
he report states, "The advent of Artificial Intelligence casts a huge pall of uncertainty as to its impact on workers across all skill levels – low, semi, and high." It warns that these issues could hinder India's ability to sustain high growth rates in the coming years. The authors call for a strong alliance between union and state governments and the private sector to address these challenges.
As AI is being hailed as a major technological advancement, it is transforming how certain businesses operate, offering the prospect of higher productivity. However, this comes at a time when private companies are struggling with a shortage of skilled workers in India's labor force.
Referring to recent hiring trends across various sectors in India, the Economic Survey notes that "deploying capital-intensive and energy-intensive AI is probably one of the last things a growing, lower-middle-income economy needs."
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From a medium-term perspective, the survey highlights that the social impact of emerging technologies like AI on labor market disruptions and labor displacement is not well understood. It also mentions the potential for AI to skew income distribution in favor of capital over labor.
The report further states, "Studies suggest that the application of AI is likely to restrain the growth opportunities for business services progressively and, therefore, poses a challenge to long-term sustainability and job creation."
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