India needs to prepare its youth in the new technology area of Artificial Intelligence (AI), which is bound to have a pervasive impact on people’s lives and their employment prospects in the coming days, Anantha Nageswaran, Chief Economic Advisor to Finance Ministry said on Saturday. 

• Also read:Lack of AI is reducing India software stocks’ heft

This is one of the key challenges that the country has to address for attaining its goal of a developed country by 2047.

“We need to prepare the youth for AI, since it is going to burst on us in a very spectacular way in the coming years and it will cause huge dislocations. We need to harness it and guide it in a manner that our youth are able to profit from that. 

That is a huge challenge which  many countries face and India is one of them but our numbers make it that much more important and serious compared to many countries,” Nageswaran said at CII’s Annual Business Summit 2024 in the capital. 

In his address at a plenary titled “Co-Creating the Future Responsibly: The Role of Business”, Nageswaran also emphasized the importance of prioritizing the physical health of the youth cohort besides focusing on AI. He noted that achieving the demographic dividend relies on ensuring the youth are healthy physically, mentally, and emotionally.

“As we aspire to graduate from middle income to an upper income country, we have to reconcile the priorities of economic growth, energy security and energy transition”, he added.

The Chief Economic Advisor also highlighted that India needs to contend with risks to its growth trajectory emanating from a combination of loose financial conditions and the uncertainty around interest rates and US dollar movements. India has to take steps to sustain high levels of growth at a time when  geo-political risks are much higher and there is slowdown in global trade.

“Global financial stability is an important risk factor we have to face in the coming years. It is a risk factor that has not yet played out which we need to factor in given our own state of market valuation in India”, he said.

Nageswaran expressed confidence that the employment generation challenge in the country will largely get addressed in the coming years on the back of better physical, digital infrastructure and improved balance sheets of banks. However, there is still work to be done on skilling and employability, he added.

On manufacturing, Nageswaran said there  is an opportunity and a need for raising the share of manufacturing in the economy and the consequent generation of low and semi-skilled jobs, apart from facilitating overall employment generation.

Job opportunities

On the issue of employment, Nageswaran said that the quantity of youth covered by India’s education system is no more a challenge, but learning outcomes are.

The Centre had, in March this year, approved an AI mission with a budget outlay of ₹10,372 crore for the next five years. 

• Also read:54% of Indian CXOs says organization lacks in AI Implementation – Microsoft Survey

Under this mission, government will among other things allocate funds towards subsidising private companies looking to set up artificial intelligence computing capacity in the country and also allocate seed funding for start-ups in the sector.