The Indian Ministry of Finance has highlighted that the rise of artificial intelligence (AI) poses major challenges to governments around the world, especially in the area of service sector employment. In its recent review of India's economy, released ahead of the interim budget on February 1, the ministry highlighted pressing issues surrounding the impact of AI on workforce dynamics.
The ministry cited an International Monetary Fund (IMF) document saying that around 40% of global jobs are susceptible to AI, and that AI has the potential benefits of complementarity alongside the risk of displacement. It pointed out. The document further emphasized the need for developing countries to prioritize investments in infrastructure and digitally skilled workforces to maximize the potential benefits of AI.
Even though India has been on a remarkable reform-led growth trajectory over the past nine years, challenges remain. A country's economic outlook no longer depends solely on domestic performance, but is increasingly influenced by global developments and interdependencies.
As the world economy witnesses increasing fragmentation and slowing hyper-globalization, India faces the impact of friend-shoring and onshoring practices, which are already impacting global trade and growth trajectories.
Furthermore, the complex balance between energy security, economic growth and the urgency of transitioning to sustainable energy sources poses multifaceted challenges. Geopolitical, technological, financial, economic, and social dimensions all intersect, and one country's policy actions inevitably affect others.
On the domestic front, Treasury will prioritize public health efforts to develop a talented and skilled workforce, ensure age-appropriate learning outcomes in educational institutions, and develop a strong and productive population. It is emphasized that this is extremely important.
The Treasury recognizes that a healthy, educated, and skilled population is critical to increasing economic productivity and emphasizes the need for concerted policy efforts in these areas in the coming years.
