The Economic Survey has pitched artificial intelligence (AI) as a tool for solving real economic and governance challenges rather than a technology race centred on building large, capital-intensive models, stating that India’s advantage lies in pragmatic, application-led deployment rather than scale alone.
In a dedicated chapter on AI, the Survey says India should leverage its late-mover position to adopt AI in a calibrated manner that aligns with its economic structure, institutional capacity and resource constraints.
Rather than competing with advanced economies in developing large foundation models that require massive compute power and energy consumption, the Survey has advocated for a focus on low-cost, high-impact applications tailored to domestic needs.
Enhancing Service Delivery
The Survey has noted that AI can play a meaningful role in improving service delivery and productivity across sectors such as healthcare, agriculture, education, urban governance and disaster management.
It has said that India’s digital public infrastructure, expanding Internet base and growing data availability provide a strong foundation for deploying AI systems that address local problems, especially in areas where access, scale and cost remain constraints.
At the same time, it has cautioned against viewing AI as a standalone solution or a substitute for institutional reform. The Survey has underlined that successful adoption will depend on complementary investments in data quality, digital infrastructure, skills and governance frameworks.
It has also flagged the need for coordination between government, industry and research institutions to ensure that AI development remains aligned with public interest objectives.
A key theme running through the chapter is the need for resource efficiency. The Survey has highlighted the rising global cost of AI compute, driven by shortages of advanced chips and energy-intensive data centres, and has said that excessive dependence on high-end infrastructure could create economic and strategic vulnerabilities.
In this context, it has advocated for developing lighter, domain-specific models that can operate effectively in low-resource environments.
Evolving Governance Frameworks
The document has also drawn attention to the importance of governance and risk management. As AI systems become more embedded in economic and administrative decision-making, the Survey has stressed the need for safeguards around data use, accountability and system reliability.
It has said that regulatory frameworks must evolve alongside deployment, rather than reacting after risks have materialised.
The Survey has positioned India’s large and diverse population as a potential advantage in building use cases that are relevant at scale, particularly in multilingual and low-bandwidth settings. It has pointed towards opportunities in areas such as voice-based services, decision-support tools for frontline workers and automation of routine public service functions.
Overall, the Survey has presented AI not as a standalone growth engine but as an enabling layer that can support productivity gains and improve service delivery if deployed judiciously.
Its central argument is that India’s AI strategy should prioritise inclusion, affordability and real-world impact over technological prestige, allowing the country to build capabilities that are sustainable and aligned with its development priorities.