Context:

Economic Survey 2024-25 introduced a concept of “stewarding institutions” for India’s AI-vulnerable workforce.

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• Stewarding Institutions are institutions that will work to advance the social acceptability of AI by promoting the right levels of transparency and accountability of AI use in sectors like healthcare and education.
• They will monitor AI adoption across different industries and sectors to identify both opportunities and threats. For e.g. Addressing AI bias which can reinforce stereotypes and deepen social inequalities.
• The survey envisions Stewarding institutions to be responsible for designing an approach that delicately balances public welfare without stifling innovation.

The Economics of AI

As per the Artificial Intelligence Index Report 2024 of Stanford University, the number of AI patents granted globally increased 62.7 per cent to just over 62,000 between 2021 and 2022.

The annual global private investments in Generative AI surged from approximately USD 3 billion in 2022 to USD 25.2 billion by the end of 2023, marking an almost eight-fold increase from 2022.

• Generative AI describes algorithms (such as ChatGPT) that can be used to create new content, including audio, code, images, text, simulations, and videos.

NASSCOM estimates that the Indian AI market will grow at 25 to 35 per cent CAGR by 2027.

Significant Challenges for India’s Labour

• AI begins outperforming humans in critical decision-making processes in areas like healthcare, criminal justice, education, business and financial services.
• Although the impact of AI on labour will be felt across the world, the problem is magnified for India, given its size and its relatively low per capita income.
• The International Labour Organisation estimates that nearly 75 million jobs globally are at complete risk of automation due to AI.
• An IIM Ahmedabad Survey highlights how 68 per cent of the surveyed employees expect their jobs to be partially or fully automated by AI within the next five years.
• 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 which is difficult in this era of artificial intelligence.

Key Suggestions by Economic Survey 2024-25

• Multisectoral Collaboration: India needs to fast-track the creation of robust institutions through a tripartite compact between the government, private sector and academia.
• Capacity-Building: Businesses will ‘need a major skill upgrade’ as the deployment of AI would raise the demand for social and emotional skills
• Social Infrastructures: These encompass Enabling Institutions, Insuring Institutions and Stewarding Institutions to help graduate our workforce towards medium and high-skill jobs, where AI can augment their efforts rather than replace them. 
• Skilling: India needs to leverage its young, dynamic, and tech-savvy population, and create a workforce that can utilise AI to augment their work and productivity.