PANDIT DEENDAYAL UPADHYAYANATIONAL ACADEMY OF SOCIAL SECURITY
EMPLOYEES PROVIDENT FUND ORGANISATION
MINISTRY OF LABOUR AND EMPLOYMENT, GOVERNMENT OF INDIA
30-31 Institutional Area, Near CNG Petrol Pump, D-Block, Janakpuri, New Delhi-110058
Phone: 011-28521199, Fax: 28525987
Email: natrss@epfindia.gov.in

No. 13/07/2020-2021/PDNASS/Misc./

Dated: 26.08.2020

To
All Officers of EPFO
Head Office/Zonal Office’s/Regional Office’s

Subject: Implications of AI on the Indian Economy

Madam/Sir,

NASSCOM, a not-for-profit industry association, is the apex body for the 180 billion dollar IT BPM industry in India, an industry that had made a phenomenal contribution to India’s GDP, exports, employment, infrastructure and global visibility. In India, this industry provides the highest employment in the private sector.

Established in 1988 and ever since, NASSCOM’s relentless pursuit has been to constantly support the IT BPM industry, in the latter’s continued journey towards seeking trust and respect from varied stakeholders, even as it reorients itself time and again to remain innovative,without ever losing its humane and friendly touch.

NASSCOM is focused on building the architecture integral to the development of the IT BPM sector through policy advocacy, and help in setting up the strategic direction for the sector to unleash its potential and dominate newer frontiers.

NASSCOM has issued a publication on “Implications of AI on the Indian Economy”.

Implications of AI on the Indian Economy

Key Findings:

1. AI as a General-Purpose Technology

AI’s ability to lend itself to diverse range of applications across a range of sectors, resembles that of GPT

The economic impact of AI led innovations are not only reflected as direct contribution to sectors but also as indirect effects on productivity that GPTs trigger

2. Key Results from the Econometric Estimation

The report results find a positive and significant relation between AI using firms and total factor productivity growth

The estimate suggests that a unit increase in AI intensity will increase TFP growth by 0.05%

On average, a unit increase in AI intensity by AI-using firms can return $67.25 Billion or 2.5% of GDP to the Indian economy in the near term

3. Micro Evidence from Case Studies

The report uses a capabilities framework as a guide to understand the causes that underline success or failure of India’s ecosystem in conducting AI-based innovation

Capabilities of firms developing AI applications in India

  • Investment Capabilities
  • Production Capabilities
  • Linkage Capabilities

Impact of AI on firms adopting AI based solutions

  • Economic Implications for business adopting AI
  • Social Implications of AI Applications
  • Implications on labour market

4. Policy recommendations

Government has an active role to play in creating institutions and enabling an AI ecosystem, while also encouraging private players to innovate and thrive

Action-oriented policy recommendations are critical for the implementation of a large-scale AI program

(This issues with the approval of Competent Authority)

Download NASSCOM  publication on “Implications of AI on the Indian Economy”.

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