India’s Economic Survey has warned that the advancement of AI in India comes with consequences, particularly for middle- and lower-income workers, with large-scale labour displacement expected as AI surpasses human decision-making across various fields, reports The Hindustan Times.

The Economic Survey of India is a pre-budget document that reviews the developments in the Indian economy over the past financial year, summarises the performance on major development programmes, and highlights the policy initiatives of the government and the prospects of the economy in the short to medium term.

The survey stated that 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.

It adds that as policymakers, the possibility of such an outcome materialising must be taken very seriously, especially for a country like India. India’s economy is predominantly service-oriented, with a large portion of its IT workforce engaged in low-value-added services. These roles are particularly vulnerable to automation, as companies may replace labor with technology to reduce costs.

According to the survey, 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. “Policymakers must balance innovation with societal costs, as AI driven shifts in the labour market could have lasting effects. Similarly, the corporate sector must act responsibly, handling the introduction of AI with sensitivity to India’s needs. A collaborative effort between government, private sector, and academia is essential minimise the adverse societal effects of AI-driven transformation and deliver inclusive growth,” the survey stated.