What is the AI Economic Council? India’s new plan to control how AI affects jobs

 In an era defined by rapid technological disruption, artificial intelligence (AI) stands as the most transformative force of the 21st century. Its potential to reshape industries, redefine productivity, and recalibrate the global economic order is both immense and unsettling. For a nation like India—with its vast, youthful demographic and its aspiration to become a $5-trillion economy—the AI revolution presents a unique dichotomy: a powerful engine for growth and a potential trigger for severe labour market dislocation. It is within this crucible of opportunity and risk that the Indian government’s proposal to establish an AI Economic Council emerges. This initiative is not merely another bureaucratic body; it is a strategic, forward-looking plan designed to proactively control, channel, and mitigate AI’s impact on jobs and the economy at large.

 The Genesis and Mandate: Beyond Ad-hoc Reactions. The concept of the AI Economic Council arises from a growing recognition that AI’s economic implications cannot be managed within the silos of existing ministries like IT, labour, or Skill Development. Its impact is cross-cutting, systemic, and potentially exponential. The Council, as envisioned, is likely to be a high-powered, inter-ministerial and multi-stakeholder body. Its core mandate would be threefold: Predictive Analysis and Mapping: Moving beyond anecdotal fears, the Council would be tasked with developing sophisticated models to forecast AI-driven job displacement across sectors—from IT services and finance to manufacturing, agriculture, and logistics. Simultaneously, it would map the emergence of new job categories and skill demands. Policy Orchestration and Development would serve as the central node for formulating a coherent national strategy.

 This includes recommending reforms in education and vocational training, designing social security frameworks for transition periods, and crafting industrial policies that incentivise “job-augmenting” rather than purely “job-displacing” AI. Stakeholder Alignment and dialogue: The Council would facilitate crucial dialogue between the government, technology companies, industry leaders, academia, and worker representatives. This is vital to build consensus, address ethical concerns, and ensure that the development and deployment of AI align with broader socio-economic goals. India’s Unique Imperative: The Demographic Dividend and Vulnerability. The urgency for such a council in India cannot be overstated. The nation’s much-touted “demographic dividend”—over 65% of the population under 35—could swiftly turn into a demographic crisis if widespread unemployment fueled by AI automation takes hold. Millions enter the workforce annually, and the traditional absorbers of this labour (IT services, back-office operations, manufacturing) are precisely the sectors most susceptible to AI-driven automation in its current form.

 For instance, generative AI tools threaten to automate a significant portion of entry-level software coding, data analysis, content creation, and customer support roles—the very entry points for India’s English-speaking, tech-aware youth. Similarly, advancements in robotics and AI vision systems could disrupt labour-intensive manufacturing and logistics. The Council’s primary role would be to steer this transition, ensuring that India’s workforce is not rendered obsolete but is upskilled and deskilled to work alongside AI.

The Strategic Pillars of Intervention: A Multi-Pronged Approach. The Council’s work would likely revolve around four key pillars to “control” AI’s impact on jobs: 1. Future-Ready Education and Training (The Supply-Side Revolution): The Council would push for a foundational overhaul of the education system. This goes beyond adding a few AI courses. It involves: Curriculum Integration: Embedding computational thinking, data literacy, and understanding of AI ethics from the school level. Modular, Agile Upskilling: Promoting micro-credentials, online platforms, and industry-academia partnerships for continuous, just-in-time learning. 

Focus would shift from rote skills to “uniquely human” competencies—complex problem-solving, creativity, emotional intelligence, and managerial skills that complement AI. Launching targeted, large-scale missions (similar to Digital India) to reskill workers in sunsetting sectors for roles in AI maintenance, data annotation, cybersecurity, green energy, and the care economy.

 2. Incentivising Human-AI Collaboration (The Demand-Side Strategy): Instead of a passive approach, the Council could guide fiscal and policy measures to shape how industry adopts AI. Encouraging businesses to develop and deploy AI solutions that augment human workers (e.g., AI-assisted diagnostics for doctors, design tools for architects) rather than replace them entirely. Fostering job creation in emerging AI fields—AI ethics auditing, prompt engineering, simulation specialists, and robotics oversight—making India a hub for not just IT services but for AI governance and innovation. MSME Focus: Developing affordable, scalable AI tools for India’s vast micro, small, and medium enterprise sector to boost their productivity and competitiveness without massive layoffs.

 3. Building a Robust Social and Regulatory Safety Net: Acknowledging that displacement will occur, the Council would need to propose a 21st-century social contract. This could include: AI Transition Insurance or Wage Insurance: Schemes to support workers during retraining periods. Revisiting Labour Laws: Adapting regulations to accommodate the gig and platform economy that AI will further enable, ensuring fair wages and benefits. Ethical AI Guidelines for Employment: Developing frameworks to prevent algorithmic bias in hiring and promotions and ensuring transparency in AI-driven HR decisions.

 4. Fostering Sovereign AI for Domestic Priorities: The Council could champion the development of “India-specific AI”—models trained on diverse Indian languages, contexts, and challenges. This could spur job creation in non-English language data processing, create solutions for agriculture (precision farming), healthcare (rural diagnostics), and governance, addressing domestic needs while building a unique technological ecosystem. Challenges and the Road Ahead: The path for the AI Economic Council is fraught with challenges. The pace of technological change may outstrip bureaucratic decision-making. There will be tough trade-offs between short-term economic efficiency and long-term employment stability. Funding massive rehabilitation programs requires significant public investment. Furthermore, achieving genuine collaboration between competing private interests and public welfare goals will test the Council’s diplomacy and authority.

 However, the very conception of this Council marks a critical evolution in India’s policy thinking—from being a passive adopter of technology to seeking to actively govern its trajectory. It signifies a shift from fear to strategy. Conclusion: Governing the Disruption India’s proposed AI Economic Council represents a bold and necessary experiment in economic governance. It is an attempt to inject foresight, planning, and human-centricity into a process often driven solely by market logic and technological determinism. By aiming to “control” how AI affects jobs, India is not trying to stifle innovation but to harness it for inclusive growth. The Council’s success will not be measured by its ability to prevent change, but by its capacity to manage the transition—ensuring that the AI revolution lifts the capabilities and livelihoods of India’s billion-strong workforce, rather than leaving them behind. In doing so, India could provide a vital blueprint for other developing economies navigating the same turbulent waters, positioning itself not just as a technology consumer but as a global leader in the responsible and equitable age of AI.