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
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Subject: Implications of AI on the Indian Economy
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”.
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
Impact of AI on firms adopting AI based solutions
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)