From fear to opportunity: Generative AI and India’s workforce transformation
By Simranjeet Singh, Assistant Professor, Accounting and Finance, Great Lakes Institute of Management, Gurgaon and Mubin Amir Sikilkar, PGPM student, Great Lakes Institute of Management, Gurgaon
A concept of ‘technological unemployment’ was introduced by a British economist John Maynard Keyne in 1930. It highlighted how labour-saving technology displaced workers faster than new opportunities can emerge. John Maynard Keynes warned of a “new disease” that required innovative solutions to balance technological progress with human welfare. It was during the Great Depression when this idea gained traction- a period of unprecedented unemployment and rapid mechanisation in industries.
Generative AI: A catalyst for India’s workforce transformation
India, the 21st century, faces a similar kind of transformation. Generative AI (GenAI) is also set to recast the Indian economy and the workforce. Having a labour pool of more than 500 million individuals and having an economy whose growth is impacted more and more by digital revolutions, the utilisation of artificial intelligence (AI) presents both immense potential and significant challenges. EY’s report The AIdea of India 2025 highlights that generative AI (GenAI) could transform 38 million jobs by 2030, boosting productivity by 2.61% in the organised sector and 2.82% in the unorganised sector. This makes India one of the largest beneficiaries of AI-driven innovations globally, yet it also underscores the urgency to address issues such as skill mismatches and technological accessibility.
Additionally, 24% of tasks throughout sectors can be fully automated, and 42% can be amplified by AI, liberating 8-10 hours of weekly time for knowledge workers. This change will give rise to an ecosystem in which collaboration among humans and machines fuels efficiency and innovation.
Sectors like IT, healthcare, and finance are already seeing dramatic changes. For example, machine learning-based predictive analysis in manufacturing minimises downtime, while telemedicine platforms increase rural healthcare access. With repetitive tasks being taken care of by automation, labourers are spending more time on high-value, innovative work that involves critical thinking and problem-solving.
Shifting labour market dynamics
India’s labour market will experience three distinct changes due to AI adoption:
- Job displacement: Routine roles like data entry, telemarketing, and basic administrative functions face a high risk of automation.
- Job transformation: Roles requiring empathy, adaptability, and problem-solving—such as educators, healthcare professionals, and project managers—will evolve as AI augments human decision-making.
- Job creation: Emerging roles such as AI trainers, ethical AI advisors, and green energy specialists reflect the convergence of technology and sustainability.
Leveraging human-machine collaboration
Compton’s vision of technology as a cooperative partner is more applicable today than ever. By 2030, human-machine collaboration will be involved in 40% of global work, and automation will cover 34% of workflows. Persistent Systems is the epitome of this collaboration with its AI project “Re(AI)magining,” which incorporates GenAI into industries such as healthcare and manufacturing. In the same way, Microsoft’s $3 billion investment in India is to train 10 million people in AI, making sure that it gets adopted on a large scale and upskilled.
Policy and strategic initiatives
To harness AI’s potential, India must address challenges such as the digital divide, regulatory frameworks, and workforce readiness. Initiatives like the IndiaAI Mission, which commits over INR 10,000 crore to AI development, and localised efforts like the Bhashini project, promoting Indic language AI solutions, are crucial. Public-private partnerships, such as NASSCOM’s skilling programs, aim to bridge gaps in digital literacy and workforce training.
AI and inclusivity
India’s diverse population and linguistic landscape necessitate inclusive AI strategies. Generative AI applications tailored for regional languages—such as IRCTC’s AskDisha chatbot and NPCI’s Hello! UPI—enhance accessibility for semi-urban and rural populations. Furthermore, AI-powered educational platforms are personalising learning experiences in regional languages, fostering digital literacy.
Way forward: Building an inclusive AI-driven future
India stands at a crossroads, with AI presenting unparallelled opportunities for growth, inclusivity, and innovation. The way ahead is a multi-pronged strategy. Investing in education and skill development programs specific to AI-based industries is critical to get the workforce ready for the future. Policymakers need to set clear ethical standards for AI usage while encouraging innovation through public-private collaborations. Mitigating the digital divide will make AI benefits accessible to disadvantaged communities. It will foster a culture of lifelong learning will facilitate workers’ adjustments to new technological developments. In addition, constructing frameworks for responsible AI innovation will sustain fairness, transparency, and inclusivity in its application. Through its educated youth force, strong digital infrastructure, and strategic programs, India can turn the problem of technological unemployment into a solution for sustainable and inclusive growth. As Satya Nadella rightly says, “AI is not just another technology; it’s the defining technology of our times.
