Budget 2023: Why focus on AI can hasten digitalisation of Indian economy

In the Union Budget 2023-24, presented by Finance Minister Nirmala Sitharaman, Artificial Intelligence (AI) has finally found a place. The FM, during her Budget speech, outlined that India will embark on a vision called “Make AI in India” and “Make AI work for India.” As part of this vision, Sitharaman proposed the establishment of centres of excellence dedicated to AI that will pop up in the country’s top educational institutions.

The minister also declared that leading industry players would collaborate to do multidisciplinary research, create cutting-edge software, and find scalable solutions to issues in sustainable agriculture, health, and urban planning. This will energize a powerful AI ecosystem and nurture top human resources in the industry.

The minister has placed significant importance on the use of Artificial Intelligence (AI) to drive the digitalisation of the Indian economy. The allocation of funds towards AI research and development, and the setting up of a National Artificial Intelligence Portal are clear indicators of the government’s commitment to making India a leader in AI.

The allocation of Rs 2,000 crore to the National Research Foundation (NRF) is a positive step in this direction. The NRF is expected to support cutting-edge research in science, technology, engineering, and mathematics, including AI. This investment will go a long way in fostering an ecosystem for AI research and development in India and will provide a much-needed boost to the country’s AI talent pool.

Moreover, the creation of the National Artificial Intelligence Portal is expected to serve as a single-window platform for AI-related information and resources, including data sets, models, and tools. This will not only make AI research and development more accessible but also help in the creation of AI-based solutions for various sectors of the economy, such as HR tech, fintech, health tech, and edtech.

AI is also expected to drive the digitalisation of the Indian economy, which is crucial for the country’s growth and competitiveness in the global market. It has the potential to transform various sectors of the economy and improve efficiency and effectiveness.

For example, in agriculture, AI can be used to increase crop yields, reduce wastage, and improve supply chain management. In the HR tech sector, AI can bring several benefits by providing organizations with new and innovative solutions to address their HR needs. By leveraging AI-powered tools, organizations can improve their HR processes, engage, and retain their employees, and minimise the risk of compliance and legal issues.

Challenges to implementation

The implementation of AI-based solutions in India faces several challenges, such as a lack of skilled manpower, limited access to data, and a lack of infrastructure. The government’s weight on AI in the Union Budget 2023 is expected to address some of these challenges and provide the necessary support for the growth of the AI sector in India.

The Union Budget 2023-24 took a positive step towards the digitalisation of the Indian economy and made India a leader in AI. The allocation of funds towards AI research and development, the creation of the National Artificial Intelligence Portal, and the investment in the National Research Foundation are expected to drive the growth of the AI sector in India and help address some of the challenges faced by the implementation of AI-based solutions. The emphasis on AI is expected to lead to increased efficiency and effectiveness in various sectors of the economy and drive economic growth.

Though the Union Budget aims to accelerate the sector’s growth, the corporate sector still has mixed sentiments because the government has not complied with its demands for tax breaks. Having said that, the industry can see the other side of the coin and proceed on a growth trajectory if the announced Budget is immediately allocated and put into action.

The writer is the Co-Founder & CBO of Instahyre- an advanced hiring platform based on Artificial Intelligence. He tweets @Sarbojitmallick, @Instahyre. Views expressed are personal.

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