This was a bit of a surprise considering what the Economic Survey for 2023-24 released on July 22, 2024, had to say about artificial intelligence  and the need for job market to adapt while steering the technological choices.

Interestingly enough, in March 2024, the then Union government had approved the IndiaAI Mission with a budget outlay of Rs 10.37 lakh crore as part of the aim to establish a comprehensive ecosystem for promoting AI innovations in the country. The FM’s Budget speech for  2023-24 also talked of setting up three AI Centres of Excellence to realize the vision of “Make AI in India and Make AI work for India”.

So, will AI get a mention in the upcoming Budget for FY26 to be presented by the FM on February 1? More importantly, would the finance minister address the issues raised in the last Economic Survey regarding AI's impact on jobs and the huge energy needs of AI data centers?

It would be good if the FM does so, for the following reasons.

AI & The Jobs Dilemma

In a slowing economy when there is already tremendous nervousness among both the existing and prospective workforce in India about their job prospects, it becomes even more important to communicate what the government has in mind to protect the interests of those who may be impacted through greater use of sophisticated AI technologies at workplaces.

Considering the government’s stated commitment to the ‘Sabka Vikas’ (development for all) principle and the stark reality that despite being the world’s 5th largest economy India lacks adequate financial resources to create a comprehensive social security system at par with those in the advanced West to take care of those whose jobs may be on the line due to artificial intelligence.

Apart from the fact that the picture is still hazy about when greater deployment of AI would lead to the creation of new and better-quality jobs to make up for the ones the tech would likely render redundant in the world’s most populous nation. And that there are also question marks surrounding the ability of India’s skills ecosystem to create a large, AI-ready workforce in diverse spheres.

An EY report titled ‘Future of Jobs in India: 3.0 – Navigating Skills in the Digital Age’, which came out in September 2024, highlighted the lack of technical skills as a major challenge in integrating AI into existing energy systems.

Avoiding talking about the challenges that AI poses to the job arena may always be the safe and easy thing to do. However, for a country like India which has always advocated that artificial intelligence should benefit everybody, the expectation would always be that it would do better and not shy away from open discussions on the disruptions that AI could cause on the jobs front.  

In this context, it may be relevant to mention that the need to protect the interests of workers who may be impacted due to the deployment of AI at workplaces is now as serious a topic for discussion worldwide as ensuring the safe and responsible use of artificial intelligence technologies.

At the G7 summit held in Italy in June 2024, a decision was even taken to “launch an action plan on the use of AI in the world of work”. “We ask our Labor Ministers to develop the action plan, envisaging concrete actions to fully leverage the potential of AI to enable decent work and workers’ rights and full access to adequate reskilling and upskilling while addressing potential challenges and risks to our labor markets,” the Apulia G7 Leaders’ Communique said.

“We emphasize the need to anticipate future skills needs, provide higher education opportunities and equip workers and employers with the skills and competencies needed to design, adopt, and work with a human-centric, safe, secure and trustworthy AI,” the Apulia G7 Leaders’ Communique went on to add on the subject.

In November 2024, the G20 Leaders’ Summit in Brazil also talked of AI and its impact on workplaces.

“We acknowledge that the development, deployment, and use of emerging technologies, including artificial intelligence, can provide many opportunities to workers, but also poses ethical concerns and risks for their rights and well-being,” the G20 Rio de Janeiro Leaders’ Declaration said.

The same Declaration went on to add that “we welcome the decision of G20 Labor and Employment Ministers to establish guidelines for the safe, secure and trustworthy use of AI in the world of work, in collaboration with other relevant workstreams.”

AI-Energy Nexus

Moving on from the matter of jobs to the subject of AI vis-à-vis energy, the FM articulating the government’s stance on the AI-energy issue in the Budget speech assumes importance due to the huge implications that the energy needs of artificial intelligence holds for the environment.

With India using the Budget to spell out how the establishment of AI data centers can fast-track the nation’s progress, there is also a need to ensure that these facilities factor in environmental concerns. 

Such a concomitant move can send out a strong message to stakeholders worldwide on how the country is walking the talk on sustainable development. And, in the process, is also likely to encourage more nations to follow the example set by India.

In its ‘Electricity 2024’ report, the International Energy Agency (IEA) had forecast that the total electricity consumption of data centres could exceed 1,000 terawatt-hours (TWh) in 2026, almost equivalent to the electricity consumption of Japan. In October 2024, a McKinsey article stated that there could “be a data center supply deficit of more than 15 GW in the United States alone by 2030.” 

In an article, published in November 2024 by the World Economic Forum (WEF), co-authored by the managing director of Accenture’s Global Sustainability Leadership, the writers pointed out that “a 1 megawatt (MW) data center can use up to  25.5 million litres of water annually just for cooling – equivalent to the daily water consumption of approximately 300,000 people.

This water consumption can exacerbate already existing water stress, especially in vulnerable regions "already facing shortages.”  

Ultimately, a Union Budget is not just about presenting the government’s yearly accounts statement and providing details about how it plans to mop up resources and where and how that money would be spent.

Significantly, it is also about showcasing the incumbent government's pro-people approach and demonstrating how it always has the back of its own citizens. Moreover, a Budget provides a fantastic opportunity for the government to make its views and thoughts on important issues of the day known to key global stakeholders.

The FM underlining the Indian government’s thinking on the issues of AI vis-à-vis jobs and energy in the Budget will, thus, be an excellent way to highlight how India intends to move on artificial intelligence, going forward, so that the tech can truly emerge as a force for good for all.

(The writer is a current affairs commentator. Views expressed are personal.)