IBEF: July 28, 2020
India’s Gross Domestic Product (GDP) in the immediate term can witness an increase of 2.5 per cent with a substantial rise in Artificial Intelligence (AI) by Indian firms, a study has found.
Investments in software, databases, and computer machinery as a proxy for AI was considered in the study and AI intensity was measured as the ratio of AI to total sales of the firm.
The study was conducted by IT industry body Nasscom along with think-tank ICRIER and Internet giant Google and is called Implications of AI on the Indian Economy. It said that to produce a positive growth shock, AI intensities should be sharply increased.
Earlier, Government has allocated an investment of Rs 7,000 crore (US$ 993.05 million) in the Union Budget towards an Artificial Intelligence. It is expected to increase the AI intensity by approximately 1.3 times, translating into spill over benefits of 3.2 per cent increase in India’s GDP.
Mr Amitabh Kant, CEO, NITI Aayog said Artificial Intelligence has become a strategic lever for economic growth across nations and will continue to be one of the most crucial technologies of the future. "By integrating new technologies like AI and ML into various sectors, we can radically leapfrog and catch up with advanced economies.”
Policy measures were also suggested under the report to support AI’s wider adoption in India which includes identifying a nodal agency for the development and diffusion of AI, building collaborative frameworks for engagement between governments, industry and academia; building an all-encompassing data strategy for India and addressing India’s skill gap in AI among others.
Mr Rajat Kathuria, Director and CE, ICRIER said, “The government has an active role to play in creating institutions and providing public goods that enable India’s AI ecosystem, while also encouraging private actors to innovate and thrive.” “The vast impacts of AI and the current circumstances combine to merit mission mode action of AI programs across sectors, by government at all levels. This will help overcome the inherent market failure evident in early phases of any technology”, he added.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.