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The world is
witnessing a paradigm shift, where algorithms, data, and machine learning
models are not just technological advancements but active participants in
economic development. In India, this transformation is particularly
significant. As the country strives toward becoming a $5 trillion economy, Artificial
Intelligence (AI) emerges as a powerful driver of structural and sectoral
change. The concept of "AI-nomics" represents this
intersection of AI and economic growth, a fusion shaping a new digital-economic
order in India.
The Rise of AI in India's Economic
Strategy.
India has deliberately
embraced AI across governance, industry, agriculture, education, and
healthcare. Initiatives like Digital India, Startup India, and
the National Strategy for AI (NITI Aayog) have laid the groundwork for adopting
AI in both the public and private sectors. Unlike industrial revolutions of the
past, this AI revolution is inclusive by design, aimed at solving
India-specific challenges, be it rural healthcare, climate-resilient
agriculture, or financial inclusion.
The economic
implications of AI are profound. According to Accenture, AI could add up to
$957 billion to India’s GDP by 2035, boosting productivity, improving
service delivery, and creating new job categories. But beyond numbers, AI is
redefining how economic value is created and distributed.
Sectoral
Disruptions and Opportunities.
1. Agriculture: AI-based
tools are helping farmers make data-driven decisions on crop selection,
irrigation, and pest control. Startups like Cropin and Fasal are using
machine learning to enhance yield forecasts and optimise resource use. This
directly impacts rural incomes and food security, core pillars of India's
economic base.
2. Healthcare: From
AI-enabled diagnostics to telemedicine, the healthcare sector is being
restructured to provide affordable and accessible services. Tools like Aarogya
Setu demonstrated AI's potential in real-time disease tracking and
response—a model that can be extended to other health interventions.
3. Finance
and Banking: AI is helping banks detect fraud, assess creditworthiness
through alternative data, and improve customer engagement. India's fintech
boom—spearheaded by companies like Razorpay, Paytm, and PhonePe is
AI-driven, enabling seamless digital transactions even in rural pockets.
4. Manufacturing
and Industry: The Make in India vision is being reimagined
through Industry 4.0 technologies, including AI. Smart factories,
predictive maintenance, and AI-optimised supply chains are enhancing
productivity and reducing operational inefficiencies.
5. Education
and Skilling: AI is playing a key role in personalised learning and
skill development, vital for a country with a young population. Platforms like Byju’s
and Vedantu leverage AI to adapt content delivery based on student
performance and preferences.
Challenges and
the Road Ahead.
Despite its
promise, India’s AI journey faces significant hurdles: digital divides, data
privacy concerns, limited research infrastructure, and a shortage of AI talent.
Moreover, the fear of job displacement due to automation calls for proactive
reskilling and policy safeguards. It is here that human-centric AI
becomes essential, one that augments rather than replaces human potential.
India must
adopt a balanced approach: investing in R&D, fostering
public-private collaboration, and building ethical frameworks to guide AI
deployment. Strengthening AI’s presence in regional languages, empowering local
innovators, and embedding AI in grassroots governance can democratise its
benefits.
"AI-nomics" is not just about
using intelligent machines; it’s about making India’s economy smarter, fairer, and future-ready. The challenge
lies in ensuring that AI doesn’t widen existing inequalities but acts as a force multiplier for inclusive growth.
As India navigates this transformation, it must ask not only how AI can boost
GDP but also how it can uplift lives,
livelihoods, and learning across the socio-economic spectrum.AI is not
the future. In India, it is the
present, actively reshaping how the economy thinks, acts, and grows with
intelligence at its core.
Dr. Chelpuru Madhu
Post-Doctoral Fellow, School of Economics,
University of Hyderabad
P. Nagaraju
Senior Research Fellow
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