Economic Survey 2025-26 says AI job panic may be overstated, highlights robust institutions as ‘need of the hour’ | Technology News

4 min readNew DelhiJan 29, 2026 02:25 PM The Economic Survey 2025-26 has sought to play down fears of large-scale AI-driven job losses, arguing that the impact of the disruptive technology on the labour market may be exaggerated.
Estimates about the magnitude of labour market impacts may be well above what might actually materialise, the Survey has said, while warning that “complacency about the ‘low probability-high impact’ nature of the issue at hand could prove to be very costly for a country like India”.
The Economic Survey, tabled Union Finance Miner Nirmala Sitharaman in Parliament on Thursday, is prepared the finance minry’s Economic Division, under the chief economic adviser, and has been released ahead of Sitharaman’s presentation of the Union Budget on Sunday.
The Survey’s comments on AI come amid a global debate on the impact that the technology could have on jobs and whether it would render entry-level roles completely irrelevant. The issue has even divided opinion among business and tech leaders.
The Survey takes a slightly different tone from its past two editions, which had painted a murky picture of how some jobs in India could decline considerably in the next decade, with low-skill and low-value-added services particularly vulnerable to AI.
“The integration of AI into India’s labour market presents an opportunity to enhance productivity, elevate workforce quality and create employment, provided systemic challenges are effectively addressed through robust institutional frameworks,” the Survey reads.
“For India, a services-driven economy with a youthful and adaptable workforce, the adoption of AI offers the potential to support economic growth and improve labour market outcomes,” it adds.Story continues below this ad
For the first time, the Survey also tackles the question of whether AI could be a solution to the world’s problems. “As policymakers, it would benefit us to ask ourselves the question, ‘What were the problems in the world that demanded AI as the answer?’ In other words, is AI a solution in search of a problem? This question is not easily answered as innovation does not always respond to a problem, rather emerges as a product of human ingenuity,” the document reads.
“Thus, in some sense, AI represents the human drive for improvement, for creating something previously thought impossible. However, when innovation has the possibility of coming at great societal cost, the value of innovation must then be judged in the context of its potential loss generation,” it adds.
‘AI still experimental at current stage’
Chapter 13 of the Economic Survey 2025-26, titled Labour in the AI era: Crisis or Catalyst, highlights the experimental nature of AI. “At its current stage of development, AI is more experimental as it is still finding its footing. This is not inherently negative, as it signifies innovation’s curious and exploratory nature. However, from a practical standpoint, its experimental nature makes its real-world utility unclear despite the technology demonstrating impressive capabilities,” it reads.

Referring to AI chatbots’ abilities to simulate human conversations, the Survey notes that their “practical effectiveness in customer service is not established since customers prefer having their complex questions dealt with humans”. The Survey identifies certain barriers to large-scale AI adoption, such as concerns over reliability, resource inefficiencies, and infrastructure deficits.Story continues below this ad
The Survey argues that since global AI adoption is still in its nascent stages, India should capitalise on it and “prepare its labour force for a future defined collaboration between human and machine intelligence”.
“Another reason we postulate that India has the time available to reinforce and build supporting institutions is due to the nature of technological revolutions. For technologies to be widely adopted, they have to overcome several obstacles that make them ubiquitous,” the Survey reads.