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Impact of AI and Automation on India’s Employment Landscape India, known for its developing population and technological landscape, faces the challenge of Artificial Intelligence (AI) integration and its impact on job creation. As industries adopt AI technologies like machine learning and robotics to boost efficiency, concerns arise about employment. While AI can create new roles and transform existing ones, there are fears of job displacement as AI automates tasks traditionally done by humans. An IMF analysis reveals that nearly 40% of global employment is exposed to AI. In advanced economies, around 60% of jobs could be affected, with half benefiting from AI integration and the other half facing reduced labor demand, potentially leading to job losses and lower wages. Conversely, emerging markets and low-income countries have lower AI exposure rates of 40% and 26%, respectively, suggesting fewer immediate disruptions. However, these nations often lack the infrastructure and skilled workforce to harness AI’s benefits, which could worsen global inequality over time. Overall, AI presents both challenges and opportunities for the future of work. In this blog, we will explore how AI and automation are transforming the Indian job market, examine their potential socio-economic impact, and suggest policy measures to harness their benefits while mitigating adverse effects. AI and Automation AI refers to the development of computer systems capable of performing tasks that normally require human intelligence, such as learning, decision-making, problem-solving, and language processing. Automation, on the other hand, involves the use of technology to perform tasks with minimal human intervention. AI and automation are part of our daily digital interactions. Social media platforms like Facebook and Instagram use AI to suggest friends by analyzing your activity. Netflix and Prime Video recommend shows based on your viewing history, while Google’s predictive search guesses what you’re looking for as you type. In e-commerce, AI helps filter products, making it easier to find what you want quickly. These technologies personalize and streamline our online experiences, enhancing convenience and efficiency. Together, AI and automation are revolutionizing industries, enabling machines to handle not just repetitive tasks but also complex decision-making processes. Key Technologies Driving AI and Automation AI and automation are powered by several key technologies that enable systems to operate more efficiently and effectively across various sectors. Machine Learning (ML) is a prominent subset of AI that empowers systems to learn from data and improve over time without the need for explicit programming. This capability allows organizations to develop applications that can adapt to new information and make informed decisions based on patterns in data. Robotics plays a critical role in automation by utilizing machines that can perform physical tasks, often autonomously or semi-autonomously. These robots are increasingly deployed in industries such as manufacturing, logistics, and healthcare, streamlining operations and enhancing productivity. Natural Language Processing (NLP) is another vital technology that enables AI systems to understand and process human language. This capability facilitates various applications, including translation services, chatbots, and virtual assistants, enhancing communication and user interaction. Finally, Automation Tools, such as Robotic Process Automation (RPA), automates repetitive tasks across sectors like finance, healthcare, and manufacturing. By taking over mundane and time-consuming activities, RPA allows human workers to focus on more complex and value-added tasks, ultimately improving operational efficiency. Together, these technologies are driving the transformative potential of AI and automation, reshaping industries and redefining how we work and interact with machines. AI and Employment Global Recent reports from Goldman Sachs indicate that AI could threaten up to 300 million jobs globally, with two-thirds of roles in the US and Europe at risk. In the UK, a survey of 22,000 job types suggests AI could impact around eight million jobs, with 11% of tasks already exposed to automation. White-collar workers earning around USD 80,000 are particularly vulnerable, as highlighted by a University of Pennsylvania report. Roles in customer service, accounting, sales, research, and retail face significant disruptions. The McKinsey Global Institute predicts that by 2023, 14% of employees may need to change careers due to AI advancements. As the job market evolves, both employees and employers must adapt to these changes, focusing on reskilling and embracing new opportunities in an increasingly automated world. India The IT industry in India has been a major employer, providing over 5.4 million jobs and creating numerous opportunities for fresh engineering graduates. However, the rise of AI poses challenges to this landscape. As companies work to become “AI-ready” through employee reskilling, technologists warn of a potential white-collar recession in India by 2027. AI will also affect blue-collar jobs in India, impacting about 300 million workers in sectors like manufacturing and healthcare. While advanced robotics may automate some tasks, mass job losses are unlikely, as AI is expected to enhance productivity rather than replace workers entirely. AI Transforming Sectors AI is reshaping various sectors in India, enhancing efficiency, improving services, and transforming customer experiences in sectors such as services, healthcare, industry and finance. The Economic Survey 2023-24 highlights the varying impacts of AI across different sectors of the economy. The manufacturing sector is relatively less affected by AI, as industrial robots lack the flexibility and cost-effectiveness of human labor. While automation is present, it does not significantly displaced workers. Service Sector The service sector is witnessing substantial AI adoption, particularly in customer service through the use of chatbots and virtual assistants. AI-powered chatbots such as Amazon India’s Alexa-powered voice assistant are revolutionizing customer support by providing instant responses and personalized interactions enabling customers to shop, track orders, and get product recommendations through voice commands. This not only improves customer experiences but also streamlines operations and optimizes resource allocation, allowing businesses to operate more efficiently. Healthcare Sector In the Indian healthcare industry, AI is making significant strides. AI-driven diagnostic tools, medical imaging analysis, and predictive analytics are enhancing the accuracy and efficiency of healthcare services. Moreover, AI-powered telemedicine platforms are improving access to healthcare in rural and remote areas, addressing the challenge of healthcare delivery in a vast and diverse country like India. By leveraging AI, the healthcare sector can provide timely and effective services, ultimately benefiting patients and practitioners alike. An Indian government-developed app Aarogya Setu using AI that provided COVID-19