Indian Economy and Financial System in the Age of AI: Pathway to a Viksit Bharat by 2047
1. Background and Context
India stands at a defining economic moment. With strong GDP growth, expanding infrastructure, and globally recognised digital public infrastructure such as India Stack and Unified Payments Interface, the country has built a solid macroeconomic base.
At the same time, the rapid rise of Artificial Intelligence (AI) is reshaping the global economic and financial landscape. For India—where the services sector, particularly IT, has been a major growth engine—this transformation presents both opportunity and risk.
As India aspires to achieve “Viksit Bharat” by 2047, the policy challenge is to ensure that technological transformation leads to inclusive, employment-rich, and ethically grounded development.
2. Current Assessment of the Economy and Financial System
2.1 Macroeconomic Strengths
Sustained high growth trajectory relative to global peers
Strong public investment in infrastructure
Improving tax buoyancy and formalisation
Resilient external sector
2.2 Financial System Stability
Guided by the Reserve Bank of India, India’s financial system has strengthened significantly:
Reduction in Non-Performing Assets (NPAs)
Improved capital adequacy of banks
Expansion of digital finance and fintech ecosystem
Greater financial inclusion through Jan-Dhan–Aadhaar–Mobile architecture
2.3 Structural Concerns
Despite strengths, several persistent issues remain:
Employment generation lagging behind growth
Income and regional inequality
Stress pockets in NBFC and retail credit segments
Slow judicial and regulatory resolution mechanisms
3. AI and IT Disruption: Implications for India
India’s globally competitive IT sector—represented by firms like Infosys and Tata Consultancy Services—is undergoing structural transformation due to AI-led automation.
3.1 Opportunities
Productivity gains across sectors (health, agriculture, logistics, governance)
Creation of new sectors (AI services, data economy, cyber security)
Global leadership potential in digital public infrastructure and AI governance
3.2 Risks
Displacement of mid-level IT and BPO jobs
Wage stagnation in routine service roles
Skill polarisation and widening inequality
Concentration of economic power in high-technology firms
4. Key Policy Risks for the Next Two Decades
Jobless or Job-poor Growth
Skill Mismatch in the AI Economy
Financial Sector Exposure to Technology-led Disruption
Digital Divide and Unequal Access
Governance and Ethical Deficits in Technology Deployment
5. Strategic Policy Recommendations
5.1 Employment-Centric Economic Strategy
Incentivise labour-intensive manufacturing and MSMEs
Develop green economy jobs (renewable energy, climate adaptation)
Strengthen urban employment programmes
5.2 National Human Capital and Skills Mission
Universal foundational learning reform
Large-scale reskilling for AI, robotics, and data systems
Industry-academia collaboration for future-ready workforce
5.3 Financial System Deepening and Risk Management
Strengthen supervision of NBFCs and fintech lending
Expand long-term bond markets and pension funds
Promote responsible AI use in credit scoring and risk analytics
5.4 AI Governance and Ethical Framework
India should emerge as a global leader in responsible AI by:
Establishing national AI regulatory standards
Ensuring transparency, auditability, and accountability
Protecting data privacy and citizen rights
5.5 Institutional and Governance Reforms
Faster judicial and contract enforcement systems
Transparent and time-bound regulatory approvals
Strengthened anti-corruption and accountability frameworks
6. Role of the State, Market, and Society
A Viksit Bharat requires coordinated action:
7. Measuring Success Beyond GDP
Development must be evaluated not only by output but by outcomes in terms of quantity and quality in the areas of
Employment
Access to healthcare and education
Financial security
Environmental sustainability
Trust in institutions for their delivery in terms of Statutory and moral Requirements.
Trust in the overall Governance Standards in Legislative, Judiciary and Executive areas.
8. Conclusion
India has a historic opportunity to transform itself into a developed, equitable, and technologically advanced economy by 2047. However, this transition will not occur automatically through growth or technology alone.
It requires:
Ethical governance
Strong institutions
Employment-oriented growth
Human-centred technological adoption
AI can be a powerful accelerator, but only when guided by wisdom, regulation, and social responsibility.
A truly Viksit Bharat will not merely be a richer India—it will be a fairer, more humane, and more trustworthy society.
May the Artificial Intelligence along with the very prudential and providential application of Natural intelligence under the guidance of Spiritual Intelligence take the economy fast forward and provide the best of quality life keeping the powerful and mighty nature in tact with the optimum use of all its energy .
Loka samastha Sukhino Bhavanthu.
T V G Krishnan
(Personal Views)
2 comments:
Well articulated. Note of caution is always the hall mark of TVG.I think Ashwini Vaishnav, the hon. minister of IT is very keen to implement a legislative framework for AI in general and specific legislations to suit specific application.Execution however is a challenge.
Thank you Sundaresan . No doubt execution is always a challenge and herein lies the competence of bureaucracy and administrative skills. There are umpteen ways of achieving all desired intents and purposes provided we have a definite approach , plans and actions. We have an enviable culture, civilisation and abundance of natural and very highly imaginable , talented, skilled and well proven human resources potential in waiting to be fully encashed and exploited. Hope something good would emerge and the growth track would be strongly laid . The inherent strength of the nation is something very great and invaluable .
Post a Comment