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    Increase in AI by Indian firms can result in 2.5% increase in India’s GDP: Report

    Synopsis

    The economic effects of AI also include indirect effects on productivity, the Indian Council for Research on International Economic Relations (ICRIER) said in the report titled 'Implications of AI on the Indian Economy'.

    Agencies
    Investment of Rs 7,000 crore, approved by the Ministry of Finance towards AI program, could increase AI investments at rates higher than the business-as-usual-rates, it noted.
    A substantial increase in Artificial Intelligence (AI) by Indian firms can result in a 2.5% increase in India’s GDP in the immediate term, a study has found.

    The study has used investments in software, databases and computer machinery as a proxy for AI and has measured AI intensity as the ratio of AI to total sales of the firm.

    The report by IT industry body Nasscom along with think-tank ICRIER and Internet giant Google called Implications of AI on the Indian Economy said that in order to trigger a positive growth shock, AI intensities should be sharply increased.

    The investment of Rs. 7000 crores announced in the Union Budget towards an Artificial Intelligence will lead to approximately 1.3 times increase in AI intensity, translating into spillover benefits of 3.2% increase in India’s GDP.

    Amitabh Kant, CEO, NITI Aayog said Artificial Intelligence has become a strategic lever for economic growth across nations and will continue to be one of the most crucial technologies of the future. "By integrating new technologies like AI and ML into various sectors, we can radically leapfrog and catch up with advanced economies.”

    The report recommends policy measures to support AI’s wider adoption in India which includes identifying a nodal agency for the development and diffusion of AI, building collaborative frameworks for engagement between governments, industry and academia; building an all-encompassing data strategy for India and addressing India’s skill gap in AI among others.

    Rajat Kathuria, Director and CE, ICRIER said, “The government has an active role to play in creating institutions and providing public goods that enable India’s AI ecosystem, while also encouraging private actors to innovate and thrive.” “The vast impacts of AI and the current circumstances combine to merit mission mode action of AI programs across sectors, by government at all levels. This will help overcome the inherent market failure evident in early phases of any technology”, he added.
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    1 Comment on this Story

    Hemant Pisat124 days ago
    To which institutions these investments of Rs.7000 crores have been allocated for AI? Can there be any specifics?
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