Economic Survey says AI to hit jobs, Is Modi govt searching for excuses?
Union Finance Minister Nirmala Sitharaman Monday presented the Economic Survey 2023-24 in the Parliament which besides other things also talks about the likelihood of Artificial Intelligence or AI cutting jobs
New Delhi: Union Finance Minister Nirmala Sitharaman Monday presented the Economic Survey 2023-24 in the Parliament which besides other things also talks about the likelihood of Artificial Intelligence or AI cutting jobs.
Though hailed in a section of media as a first official document in the world which warns about the risks AI poses, there are also suggestions that the Narendra Modi government is preparing ground to put the blame of alarming rate of unemployment on AI.
According to the latest data from the Centre for Monitoring Indian Economy (CMIE), an independent think tank, the unemployment rate in India stood at 9.2% in June 2024, a sharp increase from 7% in May 2024.
According to analysts, the unemployment rate at this level is highest in the last 50 years. This is in accordance with the Union Labour Ministry which in a report in 2019 had said the unemployment rate in 2017-18 at 6.1% was 45-year high.
The unemployment was also one of the key issues in the 2024 general elections. The ruling BJP however refutes all these reports with PM Modi repeatedly claiming “a huge generation of jobs” during the last ten years of his government.
The Economic Survey 2023-24 presented in the Parliament probably for the first time throws light on unemployment, though trying to put its blame on the latest trending technology.
“…India, with its vast demographic dividend and a very young population, is uniquely situated as AI poses both risk and opportunity. According to Capital Economics (2024), the current diffusion and adaptation of AI in India remains low compared to US, Europe, and the developed Asian economies. Manufacturing sector is less exposed to AI as industrial robots are neither as nimble nor as cost effective as human labour”, the Economic Survey said.
“In inventory and supply chain management, AI applications could rather be complementary to labour. Nevertheless, at particular risk is the BPO sector, where GenAI is revolutionising the performance of routine cognitive tasks through chatbots, and employment in the sector is estimated to decline considerably in the next ten years”, the survey said.
“In the following decade, however, gradual diffusion of AI is expected to augment productivity. Uses of AI to identify health risks out of digitalised health data, predict weather, and complementing teachers in grading tests and translating texts are some of the development gaps that AI can plug. Widespread adoption of AI across the services sector can significantly reshape and even replace jobs”, it added.
In another section, the Economic Survey 2023-24 said:
“…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,” The Economic Survey 2023-24 said.
“These will create barriers and hurdles to sustain high growth rates for India in the coming years and decades. Overcoming these requires a grand alliance of union and state governments and the private sector.”
“…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.”
In yet another section, the survey said:
“While AI has considerable potential for boosting productivity, it also has the potential to disrupt employment in certain sectors. Routine tasks, including customer service, will likely witness a high degree of automation; creative sectors will see extensive usage of AI tools for image and video creation; personalised AI tutors can reshape education and sectors like healthcare can witness accelerated drug discovery.”
The Indian Economy
Nonetheless, the Economic Survey 2023-24, defying the realties on the ground, painted a bright picture of the Indian Economy.
“The Indian economy is on a strong wicket and stable footing, demonstrating resilience in the face of geopolitical challenges. The Indian economy has consolidated its post-Covid recovery with policymakers – fiscal and monetary – ensuring economic and financial stability”, the survey said.
“…High economic growth in FY24 came on the heels of growth rates of 9.7% and 7.0%, respectively, in the previous two financial years. The headline inflation rate is largely under control, although the inflation rate of some specific food items is elevated. The trade deficit was lower in FY24 than in FY23, and the current account deficit for the year is around 0.7% of GDP. In fact, the current account registered a surplus in the last quarter of the financial year. Foreign exchange reserves are ample”, the latest Economic Survey said.
The presentation of the Economic Survey in the Parliament today is followed by the tabling of the Union Budget.
As per the schedule released by the Lok Sabha Secretariat, Union Finance Minister Nirmala Sitharaman will table the Budget 2024 at 11:00 am Tuesday July 23, 2024.
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