Why in news?
NITI Aayog released a comprehensive report on harnessing artificial intelligence (AI) and digital technologies to empower India’s informal sector. The report outlines a vision for using AI to enhance livelihoods, deliver welfare and promote inclusive growth.
Background and history
India’s labour market is dominated by the informal sector: about 90 percent of workers lack formal contracts or social security. In recent years the government has built digital public infrastructures such as Aadhaar, Unified Payments Interface (UPI) and e‑Shram. In 2018 NITI Aayog released the “National Strategy for AI,” emphasising economic growth. The new roadmap focuses on using AI for social empowerment, drawing lessons from global experiences and India’s own digital innovations.
Challenges faced by informal workers
- Financial insecurity: Irregular incomes and lack of savings expose workers to shocks such as illness or job loss.
- Limited market access: Small producers and artisans struggle to reach customers and secure fair prices.
- Digital divide: Many workers, especially women and rural populations, lack devices, connectivity or digital skills.
- Social protection gaps: Existing welfare schemes are fragmented and fail to cover all workers.
- Trust deficit: Informal workers often mistrust digital platforms due to concerns about data privacy and exploitation.
Role of AI and digital technologies
- Financial inclusion: AI-driven credit scoring and personalised financial advice can help workers access loans and insurance.
- Digital public infrastructure: Platforms such as Aadhaar, UPI, e‑Shram and DigiLocker can be integrated to create digital IDs and wallets for workers.
- Smart contracts and blockchain: These technologies can ensure timely payment and fair contracts for gig workers, farmers and artisans.
- AI-enabled skilling: Adaptive learning tools can provide personalised training in local languages, improving employability.
- Predictive analytics: Data collected from welfare schemes and labour platforms can help governments target assistance to those most in need.
Why action is urgent
- Rising inequality: Technological progress risks widening the gap between those with and without digital access.
- Demographic window: India’s population is still young, but this advantage will diminish by the 2040s. Investing in skills now will maximise the dividend.
- Global AI race: Countries are competing to develop AI capabilities. Delay could leave India dependent on foreign technologies.
- Climate pressures: AI can help mitigate and adapt to climate change by optimising resource use and predicting disasters.
- Need for ethical frameworks: Inclusive development requires guardrails to prevent algorithmic bias and ensure data privacy.
Key recommendations of the roadmap
- Digital ShramSetu Mission: Create a unified digital system that issues each worker an identity, a wallet and access to entitlements such as insurance and pension. Encourage portability across states and sectors.
- Sector‑specific AI solutions: Develop AI models tailored to agriculture, construction, retail, transport and other informal sectors to improve productivity and safety.
- Voice-first interfaces: Design apps that use Indian languages and voice commands so that people with limited literacy can use them easily.
- Public–private partnerships: Encourage collaboration between government, industry and start‑ups to build AI platforms and safeguard workers’ interests.
- Responsible AI charter: Establish principles for fairness, transparency, privacy and accountability in AI systems. Set up an independent oversight body.
- AI skilling and micro‑credentials: Offer online courses and certifications to train workers in basic and advanced digital skills.
- Impact evaluation framework: Monitor and assess the social and economic effects of AI interventions, adjusting policies based on evidence.
Conclusion
AI can be a powerful tool for social transformation if deployed responsibly. NITI Aayog’s roadmap urges an inclusive approach that blends technology with empathy. Successful implementation will depend on collaboration, capacity building and ethical governance.