Handle AI with sensitivity or face tax

India Inc should work out a “longer horizon” and practice “sensitivity”, while rolling out AI across value chains or else be prepared to face a “taxation of profits generated from the replacement of labour with technology.”
“The corporate sector has to display a high degree of social responsibility. Although impact of AI on labour will be felt across the world, the problem is magnified for India, given its size and its relatively low per capita income.If companies do not optimise introduction of AI over a longer horizon and do not handle it with sensitivity, the demand for policy intervention and the demand on fiscal resources to compensate will be irresistible. The state, in turn, has to resort to taxation of profits generated from the replacement of labour with technology to mobilise those resources. It will leave everyone worse off and the country’s growth potential will suffer, as a result.”
In line with the focus on AI across the world, the survey dedicated a full chapter to the subject, talking not just about potential dangers to jobs, especially in middle- and lower-quartiles, but also pointing to the potential benefits to output as well as quality of services and production. “Protracted labour displacement is something that a labour-surplus country like India cannot afford.”
It said India is a majorly services driven economy, with a significant share of the IT workforce employed in low value-added services. “Such jobs are the most susceptible to automation, as firms in a bid to cut costs may substitute labour for technology… India is also a consumption-based economy, thus the fall in consumption that can result from the displacement of its workforce is bound to have macroeconomic implications. If the worst-case projections materialise, this could have the potential to set the country’s economic growth trajectory off course.”
However, being a services-driven economy, AI will also help in enhancing the productivity of the country’s workforce. “Further, the younger population makes a rich talent pool available for capitalising on emerging technologies.”
The survey highlighted that expectations point toward a trend where AI begins outperforming humans in critical decision-making processes in areas like healthcare, criminal justice, education, business and financial services, among others.