With the rise in artificial intelligence (AI) adoption, the number of jobs in India’s BPO sector is set to go down drastically, said the Economic Survey 2023-24 presented by the finance minister Nirmala Sitharaman on Monday. The survey said that the impact of AI on the jobs market will vary.
For instance, the manufacturing sector is less exposed to AI as AI-powered industrial robots are neither as nimble nor as cost-effective as human labour. On the other hand, in the inventory and supply chain management, AI applications could rather be complementary to labour.
On the other hand, the survey said that the Indian economy needs to generate an average of nearly 7.85 million jobs annually until 2030 in the non-farm sector to cater to the rising workforce. To meet the demand of 7.85 million jobs in the non-farm sector per year, there’s a scope to supplement the existing schemes of PLI (6 million employment generation over 5 years), MITRA textile scheme (2 million employment generation), MUDRA, etc., the survey mentioned.
The survey pointed out that the BPO sector is at particular risk, where GenAI is revolutionising the performance of routine cognitive tasks through chatbots, and employment in the sector is estimated to decline considerably in the “next ten years”.
More importantly, the survey said that the uncertainty around AI and its impact on the job market could create hurdles to India’s sustained high growth rates in the coming years. Citing an IMF study, the survey said that 26% occupations in India are exposed to AI with 14% occupations complementing more with AI.
Experts said that since AI is fast evolving, its impact on different professions is being constantly evaluated. “While it will redefine work, AI won’t wipe out entire industries. Human creativity and judgement will always be essential. With generative AI emerging, we are closely watching its impact on various professions,” said Sashi Kumar, head (sales) at Indeed India.
Beyond job creation, the survey noted that the quality of employment and social security have their own significance. “The rising employment of flexi workers through staffing companies can be a channel for ensuring social security for informal workers,” the survey said.
The survey, however, mentioned between 2013-14 and 2021-22, the total number of factory jobs grew annually by 3.6%. In absolute numbers, employment in Indian factories has grown from 10.4 million to 13.6 million in this period.
The survey highlighted, citing data from the Annual Survey of Unincorporated Enterprises for 2022-23, that overall employment in these enterprises fell from 111 million in 2015-16 to 109.6 million in 2022-23.
“There was a reduction of 5.4 million workers in manufacturing but the expansion of the workforce in trade and services gained in jobs limited the overall reduction in the number of workers in unincorporated enterprises to around 1.65 million between these two periods,” said the economic survey.
