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Introduction

Artificial Intelligence (AI) is rapidly transforming various industries and reshaping the way work is completed. Its impact on employment in India, both in the formal and informal sectors, has been a topic of significant debate. While there are concerns about job displacement and unemployment, AI also has the potential to enhance human capabilities, increase productivity, improve job quality, and create new job opportunities[1]. This article explores the impact of AI on the formal and informal sectors of employment in India, highlighting the potential benefits and challenges it brings.

Impact on the Formal Sector

Job Displacement: The automation potential of AI has raised concerns about job displacement in the formal sector. However, studies suggest that while there might be negative short-term impacts, in the medium to long-term, AI is expected to create new job opportunities[5]. According to The India Express, around 20 million jobs are expected to be added by 2025 in India due to the promising response and latest innovations in AI technology[4].

New Job Roles: AI implementation often leads to the creation of new job roles that involve managing and developing AI systems. This presents opportunities for upskilling and reskilling the workforce[6]. The World Economic Forum predicts the emergence of specific job roles in the coming decades, such as AI and Machine Learning Specialists, Data Scientists, Information and Security Analysts, and IoT Specialists[4].

Increased Demand for AI Talent: The rise of AI has revolutionized the job market, with a significant increase in AI-related job postings. Companies are realizing the potential of AI to optimize processes, improve customer experiences, and drive innovation, leading to a growing demand for professionals with AI expertise[3].

Impact on the Informal Sector

Automation of Repetitive Tasks: AI can automate mundane and repetitive tasks in the informal sector, freeing up human workers to focus on more complex and creative aspects of their jobs[6].

Improved Productivity: AI technologies can augment human skills, leading to improved productivity and enhanced output quality in the informal sector[6].

Challenges for Labor Laws: The implementation of AI in the informal sector poses challenges for labor laws in India. As AI becomes more integrated into the workplace, labor laws must adapt to protect workers’ rights, ensure fair wages, and address issues of job security and social protection[6].

Conclusion

The impact of AI on the formal and informal sectors of employment in India is vast and diverse. While there are concerns about job displacement and challenges for labor laws, AI also presents opportunities for job creation, economic growth, and innovation. To prepare the workforce for the AI future, investments in education and skill development, as well as efficient labor market rules, are essential. As AI technologies continue to evolve, it is crucial to monitor their impact on employment and take proactive measures to ensure a smooth transition for workers in both the formal and informal sectors.

Citations:
[1] The impact of artificial intelligence on labour economics – The Times of India https://timesofindia.indiatimes.com/blogs/voices/the-impact-of-artificial-intelligence-on-labour-economics/
[2] Economists fear generative AI’s impact on India, Indonesia – Nikkei Asia https://asia.nikkei.com/Economy/Economists-fear-generative-AI-s-impact-on-India-Indonesia
[3] How AI is shifting the job market in India – Express Computer https://www.expresscomputer.in/guest-blogs/how-ai-is-shifting-the-job-market-in-india/101113/
[4] AI impact on India: Jobs and employment – INDIAai https://indiaai.gov.in/article/ai-impact-on-india-jobs-and-employment
[5] [PDF] Artificial Intelligence and Its Impact on Jobs in India – Research and Information System for Developing Countries https://www.ris.org.in/sites/default/files/Publication/Policy%20brief-104_Amit%20Kumar.pdf
[6] AI and Its Impact on Indian Labor Laws – Swipe https://getswipe.in/blog/post/ai-and-its-impact-on-indian-labor-laws