“Early evidence has also begun to temper some of the more extreme predictions surrounding AI’s near-term labour impact. A study conducted by Yale’s Budget Lab indicates that the broader labour market in the United States has not experienced a discernible disruption due to AI,” the Economic Survey said.
“Similarly, a study by Brynjolfsson, Chandar, and Chen (2025) highlights that the difference in job prospects between occupations highly exposed to AI and those with relatively low exposure is minor. According to Renault (2025), most Danish workers also benefit from the adoption of AI,” it added.
The survey said that the emerging evidence does provides some reassurance in the near term, especially for labour-abundant economies such as India. But this should not lead to complacency. And it warned of uncertainties revolving around AI’s impact in the Indian labour scenario.
“This does not invite complacency, especially from a policymaker’s perspective. While labour may be complemented in the near term as organisations work to incorporate AI into their tasks, productivity gains from augmentation have a ceiling,” the economic survey said.
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“All in all, caution is still warranted as India attempts to solve the puzzle of AI and labour. This represents one of the most considerable looming uncertainties about the technology,” it added.
Uncertainties on impact of AI on India’s labour force
The survey said that the uncertainty also extends into the evolving structures of the global AI ecosystem. “Control over critical inputs, such as data, compute, models, and standards, is increasingly concentrated. This raises concerns about market power, technological dependence, and the resilience of supply chains.
“It risks hollowing out India’s core value proposition if adaptation lags,” it said, adding that if India is to sustain its competitive edge in IT, a comprehensive evolution is necessary, and taking full advantage of the AI potential is necessary.
The survey said that the another source of uncertainty pertains to defining a regulatory approach to AI.
“Countries diverge in how they design their institutions to address AI-related challenges, reflecting differing priorities. For advanced economies, their decisions will determine how AI can be leveraged to enhance productivity in the face of labour shortages and an ageing population,” it said.
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“For India, the challenge is to govern AI in a manner that is sensitive to its economic realities. The choices that India’s own institutions make will play a central role in determining not only the pace of AI diffusion but also how its economic value is distributed across sectors and among people,” it added.
