Economic Survey moots 'AI Economic Council' to align tech adoption with jobs, skills

Artificial Intelligence

The Economic Survey 2025-26 has proposed an “AI Economic Council” to adjust the pace and sequencing of artificial intelligence (AI) adoption in India, with focus on employment outcomes, skilling readiness and broader socio-economic stability.

The survey,  tabled by finance minister Nirmala Sitharaman in Parliament on January 29,  said the proposed body should be be separate from an AI Governance Council and function as a coordinating authority rather than a technology regulator.

“The AI Economic Council, separate from the Governance Council, is intended to operate, not just with a technological imperative, but with moral imperatives that are sensitive to India’s socio-economic realities,” the survey said.

How to calibrate the pace of AI adoption in a labour-rich economy

The survey flags the risk of unchecked automation in a country with a large and diverse workforce, arguing that AI deployment must be carefully seen through to avoid destabilising labour markets.

“One of the most urgent responsibilities of an AI Economic Council is to calibrate the pace of AI adoption within the country,” it said, adding “the unchecked replacement of the workforce by automation has destabilising effects.”

The survey suggests that the Council work closely with the private sector to draw up a 10-year roadmap for AI deployment.

This should include mapping out the profile of jobs affected, geographies where displacement may be concentrated, and the scale of jobs likely to be automated or augmented.

“The institution must work closely with private sector firms to develop a roadmap for AI deployment over the next decade, outlining crucial details such as the profile of jobs affected, the geographies where displacement will be most concentrated, and the magnitude of jobs that will be both automated and augmented due to AI,” the Survey read.

Sequencing over speed

Rather than pushing rapid, across-the-board adoption, the survey argues for a phased approach in tune with institutional and skill readiness.

“AI adoption should be phased in line with institutional readiness and skill pipelines,” it said, adding that the institution may be empowered to classify AI uses into “deploy now”, “pilot”, and “defer”.

Such classification would depend on preparedness across data availability, skills, legal frameworks, and labour adjustment capacity.

Aligning AI with education, skilling infrastructure

A key role of the proposed Council should be to align technology deployment with India’s education and skilling systems, which the Survey treats as inseparable from AI policy.

“Skill policy must stand equal to technology policy,” the Survey said, highlighting that AI adoption must proceed alongside reforms in education, vocational training, reskilling pathways, and credential recognition.

The Survey mentions that over 100 crore people already have access to wired or wireless broadband connectivity, creating both a vast potential AI user base and a large pool of data.

Labour sensitivity and ethical guardrails

The survey says that AI policy must internalise India’s labour market characteristics, including high informality, skill diversity and regional variation.

“AI adoption must be explicitly subordinate to human welfare and economic inclusion,” it said, calling for labour impact assessments to be conducted with transition plans built in.

It also draws firm ethical boundaries around the use of AI. “The AI Economic Council must ensure that deployment of ‘Artificial Intelligence’ does not come at the cost of ‘Human Intelligence’,” the survey said.

Source: Economic Survey Highlights 2025-26 Infographic

Studies by MIT and Microsoft suggest that heavy use of generative AI in creative and writing work can erode cognitive capacity and critical thinking skills, it added.

Conceptual proposal, not an implementation roadmap

While the Economic Survey lays out a detailed conceptual framework and guiding principles for the AI Economic Council, it does not specify timelines, legal backing, or institutional ownership.

Instead, it refers to the proposal as part of a broader development-oriented strategy to ensure AI advances productivity without eroding employment or the dignity of work.