Policy measures like identifying a nodal agency, forming collaborative frameworks for engagement between governments, industry and academia, and building an all-encompassing data strategy for India will help support wider adoption of artificial intelligence (AI) in the country, a report said on Monday.
The join report by Nasscom, Google and ICRIER estimates that a unit increase in AI intensity by Indian firms can result in a 2.5 per cent increase in India's GDP in the immediate term.
AI intensity is measured as the ratio of AI to total sales of the firm, and in the absence of a direct measure of AI at the firm level, the model uses investments in software, databases and computer machinery as a proxy for AI.
The results of the model find a positive and significant relation between AI using firms and growth in total factor productivity (TFP), the report titled 'Implications of AI on the Indian Economy' said.
It noted that the current rate of growth in AI investments is unlikely to increase the levels of AI intensity adequately.
"In order to trigger a positive growth shock, AI intensities should be sharply increased. For example, the investment of Rs 7,000 crores approved by the Ministry of Finance towards an artificial intelligence program could increase AI investments at rates higher than the business as usual rates," it said.
This increase in investment will lead to approximately 1.3 times increase in AI intensity, translating into spillover benefits of 3.2 per cent increase in India's GDP, it added.
The report suggested certain policy measures to support wider adoption of AI in India.
It said a nodal agency should be identified for coordinating all AI-related activities in India, and government departments should develop capabilities to adapt to AI-based governance mechanisms.
Besides, prioritising resources to build pockets of excellence for sectors and offering government hand-holding to socially relevant applications will also play an important role in pushing widescale AI adoption in India.
Governments at the state and national level can directly foster growth among start-ups by inviting public-private partnerships and promoting innovative localised solutions, it added.
One of the measures suggested includes "building an all encompassing data strategy to improve state capacity to provide AI-compatible publicly available data and encourage unbiased, reliable, safe and inclusive data sharing practices".
The report suggested evaluating alternate data sharing models and formulation of laws and regulations that encourage unbiased, reliable, safe, open and inclusive data sharing for integration and dissemination of data.
It also suggested examining integration of public data, which currently exists in silos, and to ensure compatibility for different uses, it said.
The report also advised addressing India's skill gap in AI and promoting development of AI safety standards.
"India is in the midst of a once-in-a-generation disruption driven by artificial intelligence. Artificial intelligence has become a strategic lever for economic growth across nations and will continue to be one of the most crucial technologies of the future," NITI Aayog CEO Amitabh Kant said in a statement.
India can radically leapfrog and catch up with advanced economies by integrating new technologies like AI and machine learning into various sectors, he added.
"In hopes to accelerate growth and pave a path towards innovation, artificial intelligence has a definite role to play in empowering industries, infrastructure and the society at large," Nasscom President Debjani Ghosh said.
"With sheer enthusiasm we are now fostering investments in the new generation of digital natives to elevate industry growth trajectory and further boost productivity levels," she added.