AI Enabled Labour Transformation: Harnessing Technology for Inclusive Growth

India’s journey towards becoming a global Artificial Intelligence (AI) leader is gathering pace. According to a study by Microsoft, it was found that 65% of Indians now engage with artificial intelligence. This is more than double the global average (i.e. 31%). 84% of millennials are integrating AI into translation, query resolution, and workplace efficiency. Backed by an ambitious investment of Rs. 10,300 crore (US$ 1.19 billion) under the IndiaAI Mission, launched on March 7, 2024, the nation is in the process of establishing a robust high-performance computing infrastructure featuring 18,693 Graphics Processing Units (GPUs), launching an open GPU marketplace, and developing indigenous AI capabilities to meet local needs. These strategic initiatives are enhancing key sectors like healthcare, agriculture, and education and reinforcing India’s digital public infrastructure through platforms such as Unified Payment Interface (UPI) and DigiLocker. By addressing online safety and digital abuse, India is ensuring that innovation is paired with responsible governance, paving the way for sustainable growth and driving the country towards Viksit Bharat 2047.

AI’s economic impact and the transformation of labour

Recent findings underscore the fact that AI can turn around economies at the national level. A study done by McKinsey & Company asserts that AI could add about Rs. 43,25,000 crore (US$ 500 billion) to the Indian GDP by 2025. Thus, the one area of impact is automation of repetitive and mundane functions, and the other is opening opportunities for strategic, creative, and high-value jobs.

Analysis further reinforces this view by positioning AI as a new factor in production—on par with traditional inputs like labour and capital. According to news articles, AI is expected to add Rs. 83,02,662 crore (US$ 967 billion) to India’s GDP by 2035. With 16% of the global AI talent pool residing in India, we are uniquely positioned to harness AI for significant economic growth. The integration of AI promises accelerated growth and the creation of a resilient, adaptable workforce.

Sector-specific innovations driving inclusive growth

• Digital Governance: Projects like DigiYatra use AI to improve airport operations, reduce paperwork and enhance passenger experiences.
• Education: AI in education is not only related to translation in India, it also customizes learning, automates administrative functions and is behind novel teaching aids like AI tutors and humanoid robots (for example Robot Shalu). These technologies enhance teachers in personalizing content, streamlining management in class, and improving engagement with students among other things. It is also useful for bridging gaps in resource-poor areas.
• Agriculture: Innovations such as KissanGPT have resolved over 30,000 voice-based queries, offering real-time information to farmers, significantly boosting productivity.
• Financial Industry: AI automates fraud detection, compliance, and document review, allowing human talent to focus on risk management, strategic planning, and personalised client service.

Addressing the skill gap: Upskilling and reskilling for an AI-driven future

As AI penetrates all aspects of work, the importance of a digitally proficient workplace must be discussed. According to World Economic Forum (WEF), AI and machine learning roles will likely grow by 40% by 2027, thus making reskill and upskill initiatives even more necessary. These have been supplemented increasingly by vocational and technical courses within the traditional education system to bridge the divide between academic learning and the labour market. For example, the ICT Academy in Tamil Nadu is established as a public-private partnership. It focuses on developing the next generation of teachers and industry-ready students. It offers various programs, including faculty development, student skill development, entrepreneurship development, and industry-institute interaction. The academy has been recognised for its contributions to skill development and has expanded its activities across multiple states. These skill development projects have yielded impressive dividends in terms of increased employability levels and are classic cases of programs that can be initiated in education to create a well-rounded and adaptable workforce.

Moreover, the government has various welfare measures like PM Garib Kalyan Anna Yojana (PMGKAY), which is using the already developed AI-enabled digital channels for Aadhaar-based biometric verification and ePOS devices. PMGKAY thus aims to offer an easier way to distribute food grains as well as transparency for vulnerable populations. This digital transformation boosts public service delivery and increases labour transformation by creating digital roles and spurring widespread reskilling. This transformation aligns with the global projections of AI and machine learning roles growing by 40% by 2027. All this highlights the benefits transformative digitisation can offer for human resource deployment and public service delivery.

Government initiatives: Paving the way for a digital future

“AI for India 2030" is a visionary program that offers the integration of AI across the entire spectrum of socioeconomics. It provides a way for a complete transformation of the implementation of AI in agriculture, healthcare, urban planning, and manufacturing. The strategy involves two significant workstreams, the AI Playbook and the AI Sandbox. While the AI Playbook outlines a framework at the sectoral level for actionable guidelines for scalable AI integration, the AI Sandbox establishes a control setting from where start-ups and businesses can test and fine-tune innovative AI solutions before deploying them at scale. With Aadhaar, UPI, and Ayushman Bharat Health Account (ABHA) having already established a strong digital backbone, India is poised to use these initiatives to drive economic growth and social empowerment.

Investment, productivity gains, and the outlook

AI technology is witnessing widespread investments into promising ventures of a digitally driven future. For example, Microsoft has committed Rs. 25,950 crore (US$ 3 billion) over the next two years (2025-2027) for developing Azure cloud and AI capabilities in India, with plans of training 10 million Indians with AI skills by 2030. Similarly, survey results conducted by EY India suggest the adoption of generative AI may take 43-45% of productivity gains to India's IT industry in five years (2025-2030). These strategic investments express confidence in the disruptive potential of AI and highlight the importance of intertwining technology with full-fledged workforce development strategies. With organisations realising productivity gains through AI, the next phase is leveraging this to save costs, improve customer service, and create a sustainable revenue growth stream.

Conclusion

AI is facilitating a transformation in the labour workforce. It is automating routine repetitive tasks and allowing workers to focus on strategic and creative roles. AI is transforming economies and boosting productivity levels. Comprehensive approaches to the Indian model, as stated in the project "AI for India 2030," showcase the possibility of turning strategic investments in technology, infrastructure, and education into an enabling environment of inclusive growth.

The nation is laying the foundation for a dynamic workforce, ready to seize the opportunities of the upcoming intelligent age, an age rooted in gender equity, social inclusion, and ethical AI governance. In the future, as AI undergoes an economic transformation, the nation will require the collaborative efforts of the states, industries, academia, and the civil society to ensure that this technology benefits all.