“Early AI adopters can gain 20-25 per cent in net economic benefits compared to late starters,” said Amitabh Kant, CEO NITI Aayog. He was delivering a special address during the launch of the report titled ‘Implications of AI on the Indian Economy’ published by Indian Council for Research on International Economic Relations (ICRIER) in collaboration with Google and NASSCOM. Stressing the need to accelerate India's AI efforts, Kant said that AI adoption will not be uniform across. “We need a comprehensive and combined efforts from the Indian tech community and government to accelerate our AI efforts. We need a quantum jump,” he said. For this, he suggested that India should focus on three things to build our AI competence. India has huge data and will become data intelligence country soon. “We have to focus on computing at large scale and also on algorithms. These three hold the key,” he said. 

Increase in GDP

The report is based on a study done to trace the impact of AI on the Indian economy using an econometric model to estimate the impact of General Purpose Technologies (GPTs), such as AI, on firm productivity. The study found out that AI has an unambiguous impact on the economic growth of India. “While its diffusion is still limited, AI has increased firm efficiencies. A unit increase in the AI intensity will increase the total factor productivity(TFP) by .05 per cent,” stated the report. A unit increase in the AI intensity can also result in a 2.5 per cent increase in India’s GDP in the immediate term. 

“India will benefit a lot when we start thinking of AI as a tool, an enabler rather than a complex technology,” said Debjani Ghosh, President, NASSCOM. “AI can solve so many problems especially with respect to last-mile access on healthcare, education and so on. It’s not about how much we can innovate but how much big problems we can solve with AI,” she said.  

There is significant momentum in the Indian economy, both from the private sector as well as from the government to promote a flourishing AI-based ecosystem in the country. This momentum is founded on the acknowledged potential of AI to trigger economic growth and social welfare. The ecosystem requires nurturing, especially to safeguard from potential risks of unethical use and industrial disruption.

Explaining the various case studies that Google did in collaboration with NGOs and companies on ‘AI for social-good’, Manish Gupta, Director, Google research India, said that AI has a leapfrog opportunity in India especially in the healthcare sector. “There is room to get smarter in wellness and preventive healthcare. Sensors, mobiles and wearables can help in the timely intervention of diseases like cardiovascular diseases,” he said. 

The report also included case studies of firms developing AI-based applications across a range of sectors and firm-level capabilities that drive innovations in AI. The study concluded with actionable policy recommendations like identifying a government agency that can act as a nodal agency for the diffusion of AI, addressing skill gaps and building collaborative frameworks including governments, industry and academia.