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India’s Vision for AI Leadership: Insights from the Union Budget 2023-24

The AI Initiative in the Indian Economy

Our sources reveal that during the unveiling of the Union Budget for the fiscal year 2023-24, Finance Minister Nirmala Sitharaman emphasized the government’s intent to leveraging artificial intelligence (AI). The planned inclusion of three AI centres of excellence in premier educational institutions was a key highlight. The objective of such efforts is to advance the ‘Make AI in India’ and ‘Make AI Work for India’ visions. Collaboration with industry leaders for comprehensive research and development of sophisticated applications in sectors such as agriculture, health, and sustainable cities is expected.

Anticipations from the Upcoming Budget

As per our reports, the projections for the budget to be presented on February 1 suggest that Sitharaman might provide detailed insights into India’s AI strategy and allocate funds to distinct AI programmes. Large scale adoption aligns with Prime Minister Narendra Modi’s recent AI Mission and India’s maiden AI unicorn, Krutrim AI. Various departments within the government, such as the Department of Administrative Reforms and Public Grievances, are identifying potential applications of AI in public service delivery.

The Role of the Private Sector and State-led Initiatives

With India already being recognized for its skilled workforce and eminent IT solutions, enhanced private sector innovation and state-led initiatives are necessary to establish global leadership in AI. The vital elements include policies that foster innovation, ease of access to data and hardware, the development of national champions, and a conducive regulatory environment.

Opportunities in the Semiconductor Industry

In the context of the AI industry, the semiconductor industry plays a significant role. India’s established prowess in chip design and the government’s hefty $10 billion subsidy plan for semiconductor-related infrastructure development present considerable opportunities. Nonetheless, further investments and public-private partnerships for large-scale chip design should be considered.

Data: The Crux of AI Research

A robust AI research ecosystem necessitates a focus on data. Formulating indigenous data sets, particularly in Indian languages, is vital. The proposed India Dataset Platform (IDP) from the AI Expert Group Report of 2023 could accelerate its execution with dedicated funding. Offering tax incentives for data centre investments might also encourage hardware imports.

The Need for a Specialized AI Agency

An agency specific to AI development, similar to UIDAI and NPCI for Aadhaar and UPI, is a potential requirement. This organization, while possibly having overlaps with the India Data Management Office in terms of data management, could lead the technical aspects of AI technology evaluation, regulation, testing, and development.

The Imperativeness of an AI Innovation Ecosystem

Given the estimated $1.2-1.5 trillion growth by 2030 from AI applications across crucial sectors, nurturing an AI innovation ecosystem is non-negotiable. Any delay in policy measures could put future economic competitiveness at risk. The Indian government’s boldness and ambition in important policy decisions should be echoed in AI initiatives as well.

Compiled with inputs from Prosenjit Datta, Content and Knowledge CoE lead – EY India, and Rajnish Gupta, partner, Tax and Economic Policy, Group – EY.

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John Kerry

John Kerry, a distinguished author in the realm of science, explores the intricate intersections of environmental policy and scientific advancements. With an insightful pen, he navigates complex issues, offering readers a profound understanding of the crucial role science plays in shaping sustainable futures. Dive into Kerry's work on ReaderWall to embark on a journey through the nexus of science and policy.