AI will pressure India to upskill workers, top official says
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India needs to create at least eight million jobs a year until 2030 to absorb its growing workforce.
PHOTO: AFP
Artificial intelligence (AI) will put pressure on India to improve the skills of its workforce to create the millions of jobs needed for its young people, a senior government adviser said.
Speaking at the India AI Impact Summit on Feb 16, Dr V. Anantha Nageswaran, chief economic adviser to the government of India, said that for advanced economies facing demographic decline, AI may serve as a supplement, but “for India, it is a stress test of our state capacity”.
“If AI displaces faster than we can skill humans and if productivity rises without employment elasticity, if institutional reforms lack technological adoption, we risk squandering our demographic window,” Dr Nageswaran said in New Delhi on Feb 16. “We risk widening inequality at precisely the moment of greatest change.”
India needs to create at least eight million jobs a year until 2030 to absorb its growing workforce, and if AI outpaces efforts to upgrade skills, the country risks widening inequality, he added.
His comments come as India struggles to create enough jobs for millions entering the workforce each year, even as it aims for sustained 8 per cent growth to become a developed nation by 2047.
The window for job creation is finite. Over the next 15 years, India’s labour force is set to expand, then level off and begin to age, putting a clock on the nation’s chance to capitalise on its demographic dividend.
Dr Nageswaran said the country needs to strengthen education and skills while simplifying rules in labour-intensive sectors to benefit from the opportunity presented by AI.
Currently, only a small proportion of India’s over 1.4 billion people – just 4.4 per cent – are formally skilled, according to the government’s Economic Survey 2023-2024, despite various policy measures.
Software companies like Infosys and Tata Consultancy Services, which employ millions, have fallen out of favour with investors amid mounting concerns that AI could disrupt their traditional business models.
Automation fears have weighed on information technology stocks in February, pushing the Nifty IT Index to its worst week since April.
“If we don’t ensure calibrated AI deployment, we will not merely miss an opportunity, we will create unavoidable social and economic instability,” Dr Nageswaran said, adding that for India “it isn’t a debate about (the) future of work, it is a decision about the future of growth, social stability and cohesion.” BLOOMBERG
