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Informist, Monday, Jul 22, 2024

--EconSurvey: Svcs sector focus areas must include blockchain, AI 

--EconSurvey: Application of AI may pose challenge to job creation 

--EconSurvey: AI may restrain growth opportunities for business svcs 

NEW DELHI – Though the surge in e-commerce platforms has generated heightened demand for information technology-backed logistics and digital payments in the medium term, the application of artificial intelligence will likely progressively restrain growth opportunities for business services in the long term, according to the Economic Survey 2023-24 (Apr-Mar). Further, it also poses challenges for long-term sustainability and job creation, it added. 

The services sector continues to significantly contribute to India's growth, accounting for about 55% of the economy in 2023-24 (Apr-Mar), the survey 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 document said. "These will create barriers and hurdles to sustained high growth rates for India in the coming years and decades," it added. 

Though technology enhances productivity beyond doubt and is emerging as the biggest strategic differentiator determining the economic prosperity of nations, its social impact is barely understood. "Its productivity-enhancing potential is beyond doubt, but the social impact of emerging technologies such as Artificial Intelligence via labor market disruptions and labor displacement is barely understood," the survey said.

Tax policies on the treatment of capital and labour incomes will likely play a more important role in the coming years, especially since the deployment of technology like AI may have a more "deleterious impact" on employment and income, the survey said. However, information technology cannot be ignored as it continually evolves and remains among the most in-demand roles in the global job market, it added. 

India is among the founding member of the Global Partnership on Artificial Intelligence, and the Union Cabinet has approved an allocation of over 103 bln rupees towards the comprehensive IndiaAl Mission to democratise access to artificial intelligence innovation pillars and ensure the global competitiveness of India's Al ecosystem, the survey said. 

There are over 13,000 commerce ministry-recognised startups in artificial intelligence, the Internet of Things, robotics, and nanotechnology in 2023-24 (Apr-Mar), it added. 

On incentivising Global Capability Centres, India is promoting specialisations in higher education. "Focus areas should include Blockchain, Artificial Intelligence, Machine Learning, Internet of Things, Cybersecurity, Cloud Computing, Big Data Analytics, Augmented Reality, Virtual Reality, 3D Printing, and Web and Mobile Development," the survey said. 

In the last couple of years, more than 150 multinationals have set up Global Capability Centers in India. By 2028, it is seen rising to 2,100 centers, with the market size touching $90 bln, according to a PwC report. 

As per Wizmatic, Indian Global Capability Centers are estimated to generate a total revenue of $121 bln by 2030, from $46 bln in 2023. Global Capability Centers are offshore units established by multinational corporations to provide a range of services, including information technology.  End

US$1 = 83.66 rupees

Reported by Afra Abubacker

Edited by Akul Nishant Akhoury

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