One of the big announcements made by Finance Minister Niramala Sitharaman at the interim budget 2024 has gone almost unnoticed. The “Anusandhan” scheme, which proposes to make a landmark push to the innovation and research ecosystem is a big gamechanger.
The “Anusandhan” scheme is about setting up a Rs 1 lakh crore ($12 billion) corpus via interest-free loans for 50 years, marking a clear focus on long-term goals. While the details of the scheme are yet to be chalked out in terms of execution, it is clearly a strategic move by the government to make the critical foundation for “Viksit Bharat” by investing in sunrise sectors with higher margins of growth, using long term intent capital for the first time.
Currently India is at a crucial juncture in time, with the sixth wave of innovation (as per World Economic Forum) where rapid capability of AI is coinciding with the demographic peak potential of close to 900 million people in the 15 to 64 age group.
Need For Indian AI ecosystem
The rapid progress of AI in a very short period of time is going to result in a new economic value of $15.7 trillion by 2030 as per PWC research, with a rise in the Intelligence Economy built by connected humans and intelligent machines.
In the next 20 years, the need for jobs will be even higher as India has more than 50 percent of its population below the age of 25. Now, imagine if Generative AI is able to displace a large part of low-skilled jobs with impact being 14 times higher for low income jobs (McKinsey Research), while creating a much higher-paying set of new jobs, which could be remote in nature.
With demand for jobs going up but supply going down, the current unemployment rate of 7 percent can go as high as 25 percent, if there is no intervention. This will lead to higher poverty levels in our country which will in turn lead to lack of quality education eventually leading to lack of skill development. This would imply that while AI gets better, humans become irrelevant in certain areas of the job market thus creating further unemployment. This vicious cycle can create havoc for India with a teeming large and young population. India has to build its own AI ecosystem owned strategically and regulated with geopolitical aspects with Indian interests in mind, where 900 million Indians can be quickly skilled with India specific AI innovations to produce a much larger economic outcome.
The accelerated pace of discovery possible with AI, will impact almost all spheres of scientific discovery, from new materials for defense and space to personalised medicines to new ways of learning and skilling. If India doesn’t have its own computational infra available at best cost, even well-funded Indian startups and scientists may get excluded from the huge opportunity to create unique value in AI. Currently the best AI startups and AI scientists in India are leaving Indian shores for want of enough capital (India has 35x less capital behind AI compared to US) and lack of AI computing ecosystem in India. The current leaders in AI, especially Google and Facebook, enjoy the benefit of access to proprietary data generated by humans across the world.
Startups can do it too
However, as OpenAI and some other startups have proven, the lead of BigTech is not so huge that new players cannot compete. To break the monopoly of Google in AI, OpenAI took an unprecedented amount of computational resources and backing of a tech leader like Microsoft. India has enough talented and passionate researchers to remain competitive. But they do not have access to the state-of-the-art computing infrastructure which is essential for doing cutting edge work in AI.
There is a marked shift of professors in top universities of India (like IISc, IIT Bombay) taking sabbaticals to work for non-Indian organisations. With Large Language Models, English is becoming the natural interface language for machines leading to loss of language specific emotions and notions, eventually leading to loss of Indic civilisational knowledge and cultural practices over a period of time. This loss may be strategic and silent at the same time. Further the defence ecosystem needs to leverage AI as shown by conflicts in Ukraine, to remain competitive, with defence simulators, unmanned systems and drones.
Rapid rollout with the right incentive structure of ”Anushandhan Scheme” can make sure that India doesn’t just become a consumer of AI, but also a producer of AI, with associate higher share. For India to get to a $30-35 trillion economy by 2047, a growth of even 7 percent is not enough. For India to grow at a faster rate, it has to completely revamp the AI innovation ecosystem and capture a far higher share of the global economy in the lucrative sunrise sectors. To get to that objective, the “Anusandhan” scheme is a really laudable departure. Moneycontrol