8. Artificial Intelligence: A Catalyst for Viksit Bharat and Global Economic Risks

At the AI Impact Summit 2026 in New Delhi, IMF Managing Director Kristalina Georgieva highlighted that Artificial Intelligence (AI) serves as a double-edged sword for the Indian economy. While AI has the potential to accelerate India\'s journey toward the \'Viksit Bharat\' (Developed India) 2047 goal by boosting global and domestic growth, it simultaneously threatens labor market stability and financial integrity. • Economic Growth Engine: The IMF projections suggest AI could enhance global GDP growth by approximately 0.8%, potentially pushing growth rates beyond pre-pandemic levels and creating new economic opportunities for India. • Labor Market \'Tsunami\': AI is expected to impact 40% of jobs globally and in emerging markets, while advanced economies face a 60% disruption. This includes both job enhancement and total elimination over a short time horizon. • The Digital Divide: There is a significant risk of increasing global inequality, where \'AI-ready\' nations prosper while those lagging in digital infrastructure and skills are left behind. • Financial Stability Concerns: The IMF warned of risks to financial markets where autonomous AI systems could potentially \'get loose,\' causing market volatility and instability. • Skill-Premium Shift: Early research indicates a shift in the labor market where 10% of current jobs already require AI-specific skill sets; workers possessing these skills are seeing significantly higher wage growth. • Policy Imperative: To harness AI as a \'force for good,\' the IMF emphasizes the need for rapid investment in digital infrastructure, proactive skilling, and a robust regulatory framework to manage displacement.Constitutional and Legal Provisions • Article 38 & 39 (DPSP): These mandate the State to secure a social order for the promotion of the welfare of people and to ensure that the operation of the economic system does not result in the concentration of wealth— highly relevant as AI risks widening the wealth gap. • Article 21 (Right to Livelihood): The Supreme Court has interpreted the Right to Life to include the Right to Livelihood. Massive job displacement without resettlement policies could lead to judicial scrutiny regarding the state\'s role in social security. • National Strategy for Artificial Intelligence (NITI Aayog): The \'AI for All\' strategy focuses on leveraging AI for social inclusion and economic growth while addressing ethical concerns and privacy. • Digital Personal Data Protection (DPDP) Act, 2023: Provides the legal framework for data usage, which is the primary fuel for AI models, ensuring balance between innovation and individual privacy rights. Key Definitions • Viksit Bharat: The Government of India\'s vision to transform the nation into a developed entity by 2047, the 100th year of independence. • Disruptive Technology: An innovation that significantly alters the way consumers, industries, or businesses operate, often making previous systems or skills obsolete. • AI Readiness Index: A metric used to measure how prepared a government is to implement AI in its public services and how resilient its economy is to AI-driven changes. • Generative AI: A subset of AI capable of creating new content (text, images, code), which is the primary driver behind the current \'tsunami\' of labor market anxiety. Conclusion The IMF\'s outlook serves as a clarion call for India to balance its technological ambitions with social safeguards. While AI provides the necessary velocity to reach \'Viksit Bharat\' targets, the transition requires a \'human-centric\' approach. Success will depend on India\'s ability to turn the \'tsunami\' of job displacement into a wave of \'job enhancement\' through massive re-skilling initiatives and proactive financial regulations. UPSC Relevance • GS Paper III (Economy): Impact of technology on employment; Inclusive growth and issues arising from it; Industrial policy changes. • GS Paper III (Science & Technology): Developments and their applications in everyday life; AI and ethics; IT and Computers. • GS Paper IV (Ethics): Ethical dilemmas in the use of AI; Technology and social justice; Human values vs. algorithmic efficiency