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AI could slow BPO sector growth: Chief Economic Advisor Nageshwaran

ANI   

AI could slow BPO sector growth: Chief Economic Advisor Nageshwaran
Chief Economic Advisor V Anantha Nageswaran emphasized the crucial and positive role that artificial intelligence (AI) can play for the Indian demography and labour force during a press conference on the Economic Survey 2023-24.

He noted that within the next decade, India is poised to become the world's third-largest economy and will benefit significantly from its demographic dividend.

However, Nageswaran also acknowledged potential challenges posed by AI, particularly for India's Business Process Outsourcing (BPO) sector.

He stated, "The short-term challenge of generative AI could slow BPO sector growth, affecting customer services. It is possible that the jobs related to BPO will be under threat whereas AI may actually turn out to be a booster."

Furthermore, Nageswaran also pointed out that the emergence of AI might reduce annual productivity growth by approximately 0.3 percentage points in the coming years. This indicates a potential short-term dip in productivity as industries adapt to new technologies.

Despite these challenges, Nageswaran added that the long-term potential of AI is promising. The broader adoption of AI could lead to significant improvements in critical areas such as healthcare and education, thereby enhancing human capital.

The economic survey presented in the Parliament by finance minister Nirmala Sithraman says in the medium term Indian economy can grow at a rate of 7 per cent.

The economic survey stated, "In the medium term, the Indian economy can grow at a rate of 7 per cent plus on a sustained basis if we build on the structural reforms undertaken over the last decade. This requires a tripartite compact between the Union Government, State Governments and the private sector."

Achieving a sustained growth rate of over 7 per cent will require a tripartite compact between the Union Government, State Governments, and the private sector. India's financial sector is undergoing critical transformations.

During FY24, primary capital markets facilitated capital formation of Rs 10.9 lakh crore, accounting for approximately 29 per cent of the gross fixed capital formation of private and public corporates in FY23.

It further adds India faces a unique blend of opportunities and challenges amid global trends such as geo-economic fragmentation, a push for self-reliance, looming climate change, the rise of technology, and limited policy space. (ANI)

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