The Economic Survey published on Monday warned against the potential challenge that artificial intelligence could present to the Indian economy saying the “advent of the tech casts a huge pall of uncertainty as to its impact on workers across all skill levels – low, semi and high.” The massive changes owing to widespread adoption of AI “will create barriers and hurdles to sustained high growth rates for India in the coming years and decades.”

Economic Survey 2023-24 LIVE updates

The report recognised that while AI could boost productivity, its disruptive powers couldn’t be undermined. It highlighted routine tasks like customer service, “which will likely witness a high degree of automation,” the usage of AI tools in the creative industries, personalised AI tutors in education and AI-related drug discoveries in healthcare. 

The report also noted that as AI was quickly becoming a general-purpose technology as often used as electricity and the internet, it was emerging as a “strategic differentiator determining the economic prosperity of nations.” 

Additionally, there was a danger that AI could skew the capital and labour shares of income in favour of the former. 

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According to the survey, AI could also prove to be a setback for climate goals of developed countries which are ramping up efforts of building large language models or LLMs that consume huge amounts of power. Citing a Goldman Sachs report from April, the document shared that AI could become “one of the major bottlenecks for clean energy transition, and the addition of data centres and AI could exacerbate this”. 

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On the other side, the survey acknowledged the AI-related Foreign Direct Investments or FDI that had flown into the country in 2022. A NASSCOM study had called India an attractive region for AI investments due to its relatively low operating costs and the world’s second-largest pool of highly skilled AI, machine learning, and big data workers.

Earlier in February this year, Tomer Cohen, chief product officer of LinkedIn had shared that AI could impact over half of Indian jobs. He added that Indian professionals were using their AI skills three times more than the global average.