With technologies becoming a huge part of our day to day lives, various reports and studies tell that Artificial Intelligence can help with the growth of the Indian economy.
A report by IT industry body Nasscom along with think-tank ICRIER and Google has found that an increase in artificial intelligence (AI) intensity by Indian companies can result in a 2.5% surge in India’s GDP in the immediate term.
Before we tell you why this is an important finding, we need to explain a couple of things.
Firstly, What Is AI?
In simple terms, AI involves using computers to do things that traditionally need human intelligence. This means creating algorithms to classify, analyse and draw predictions from data. It also involves acting on data, learning from new data and improving over time.
Secondly, What Is AI Intensity?
AI intensity is the ratio of AI to total sales of the firm. So, the more intense the AI becomes in an economy, the more productive that the economy will become.
How Will This Help The Economy?
The report says that a unit increase in AI intensity can add up to $67.25 billion or 2.5% to the GDP to the Indian economy. The report also said that the investment of ₹7000 crore announced in the Union Budget towards AI will lead to approximately 1.3 times surge in AI intensity, translating into spillover benefits of 3.2% jump in India’s GDP.
Besides this report, another study by Deloitte determines that AI has merits that are specific to the governments. AI can speed up governance by 20%, which will free up 96.7 million hours, helping governments with $3.3 billion worth benefit.
How Can We Use AI To Drive The Economy?
The report has suggested a 5-step policy that will help India to get the maximum benefits from AI:
- One central agency should co-ordinate all of India’s AI activities and this agency push other departments to develop their own AI capabilities.
- Governments at the state and national levels can directly promote growth among startups by inviting public-private partnerships and supporting innovating localised solutions.
- The government should develop a concrete AI data strategy
- The government should bridge the skill gap by combining AI as part of formal education.
- India needs to effectively participate in the AI standardisation process.
In conclusion, India needs to step up its AI game. We need to come up with more strategies that will help companies adopt the technology, which in turn will help the Indian economy. And we have complete confidence that we will be able to deploy measures and achieve new lengths in this technology.
Head to moneyguru’s Insight section to stay updated on all major financial news updates of the day!