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As per the Economic Survey, the adoption of AI in various sectors poses potential risks, particularly for the country’s middle and lower-income workers.
The Survey further noted that that the adverse effects of adoption of AI may not be far different from previous technological shifts (Representative image)
The Economic Survey 2025, tabled by Union Finance Minister Nirmala Sitharaman on Friday in the Lok Sabha raised significant consequences regarding the widespread adoption of Artificial Intelligence (AI) in large portion of economically valuable work, from healthcare and research to finance and education.
As per the Economic Survey, the adoption of AI in various sectors poses potential risks, particularly for the country’s middle and lower-income workers as the new technology is expected to surpass human decision-making capabilities and displace large-scale labour mainly in lower-wage roles, as companies increasingly replace human workers with more cost-efficient AI systems.
“Developers of Artificial Intelligence promise to usher in a new age, one where a bulk of the economically valuable work is automated. AI is anticipated to surpass human performance in critical decision-making across various fields, including healthcare, research, criminal justice, education, business, and financial services. This can result in large scale labour displacement, especially at the middle- and lower-quartiles of the wage distribution,” the survey said.
The Survey further noted that that the adverse effects of adoption of AI may not be far different from previous technological shifts. According to Andrew Haldane, former Chief Economist of the Bank of England, the previous shifts have been characterised by economic hardships, prolonged unemployment for displaced workers, and growing income inequalities.
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“Fears of adverse effects of large-scale AI adoption may not seem as far-fetched when viewed in the context of previous industrial and technological revolutions. As illustrated by Andrew Haldane, the former Chief Economist of the Bank of England, previous industrial and technological revolutions have been ‘painful’, characterized by widespread economic hardships, protracted unemployment for those displaced and widening income inequalities,” it said.
The Economic Survey further emphasised on the need for robust institutions to help the Indian workforce transition from low-skill to medium- and high-skill jobs to ensure that AI complements human effort, rather than replacing it entirely.
“Minimising the negative impacts of creative destruction has always required a collective societal effort, involving the creation of new social infrastructure to promote environments where innovation leads to inclusive growth. India will therefore have to fast track the creation of robust institutions through a tripartite compact between the government, private sector and academia,” it said.
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The Economic Survey further suggested that “Augmented Intelligence” – a model where human and machine capabilities work together – could drive the future of work. This approach not only boosts productivity but also has the potential to increase the employment-to-population ratio, as seen during previous periods of automation.
“Leveraging its young, dynamic, and tech-savvy population, India has the potential to create a workforce that can utilise AI to augment their work and productivity. Thus, India’s employment challenge is not just one of numbers, but also one of raising the overall quality of its workforce,” it said.
Read More: Economic Survey 2025 Pegs FY26 GDP Growth At 6.3-6.8%; Higher Than IMF’s 6.5%
A day before the Union Budget 2025-26, Economic Survey 2024-25 was tabled in the Lok Sabha. The document, authored by a team led by India’s Chief Economic Advisor V Anantha Nageswaran, provided insights into the performance of the economy in the ongoing financial year, and outlook for the next fiscal.
According to the latest Economic Survey, India’s GDP is projected to grow between 6.3 per cent and 6.8 per cent during the financial year 2025-26. It is compared with India’s official first advance estimate of 6.4 per cent.
(With inputs from agencies)