Economic Survey strikes optimistic tone on AI impact on labour in India

Economic Survey 2024–25 highlights AI's impact on workforce, emphasizing need for skilling, institutional involvement, and social responsibility.

The Economic Survey 2024–25 struck an upbeat tone on the implications that Artificial Intelligence (AI) could have on the workforce. In defiance of the concern that AI could replace some jobs, particularly in the Information Technology sector, the Survey says that appropriate skilling would allow Indians “to stay one step ahead of technological developments,” and that harnessing AI “would minimise or even eliminate the potential adverse impact on employment and, if possible, turn it into a force for augmenting employment.”

In an entire chapter dedicated to AI and labour, the Survey acknowledges, “With AI research and development currently concentrated in the hands of a few, very large companies that control the resources to erect high entry barriers, AI adoption in place of humans presents the risk of concentrating the benefits of automation.” In India, “employment numbers make the magnitude of [AI’s] impact something worth paying attention to,” the report says.

Economic Survey 2024-25 LIVE

The report acknowledges that while previous technological advancements — such as the first industrial revolution — had often increased job opportunities, this came at the expense of displaced workers facing “protracted” unemployment, for decades on end, known as Engle’s pause. The report attributes this lag to the relationship between capital and labour “not [being] carefully managed by capable institutions”.

Such a lag is not desirable for India’s service-led economy, the report advances. “India would have to create an average of 78.5 lakh jobs annually in the non-farm sector by 2030 to cater to the rising workforce,” the report says, citing the Survey’s findings in other chapters. 

But the report also casts technological advancements as a net benefit for employment, citing low job losses in India from factory automation, and the potential for “Human-AI teams” in scientific research “[T]he future of work is ‘Augmented Intelligence’, one that expands the workforce to accommodate both humans and machines,” the report says.

The role of institutional involvement in stewarding AI’s growth in India is key, the report posits. Even though the labour implications of AI are not yet here, the report warns, labour markets themselves are “shifting” in anticipation, which may have costs. As such, the report says, “The responsibility for course correction will then fall in the hands of the public sector,” calling for vigilance.