Relevance: GS III (Economy & Technology) | Source: The Hindu / India Today

1. The Good News: Faster Growth

Recently, the head of the International Monetary Fund (IMF), Kristalina Georgieva, gave a big statement about Artificial Intelligence (AI) in New Delhi.

• Economic Boost: She said AI can increase global economic growth by 0.8% every year.
• Viksit Bharat: Because of this extra growth, India’s dream of becoming a fully developed nation (“Viksit Bharat”) by 2047 is very much possible.

2. The Bad News: The Job Tsunami

While AI is great for the economy, she gave a strong warning. She compared AI’s impact on jobs to a massive “tsunami”.

• Global Impact: AI will affect around 40% of all jobs in the world (including India). In rich, advanced countries, it will affect 60% of jobs.
• The Freshers’ Crisis: The biggest danger is for young graduates. AI can easily automate routine, “entry-level” jobs. This means freshers might find it very hard to get their first job.
• The Squeezed Middle: Highly skilled workers will get richer, and low-skilled manual workers (like restaurant staff) will still be needed. But middle-level desk jobs are at a great risk of disappearing.

3. The Three Major Risks

The IMF Chief asked governments not to “sugarcoat” the reality. She highlighted three big dangers:

• Job Losses: Millions of people might lose their traditional jobs very quickly.
• Rising Inequality: Countries with good AI technology will become much richer, while poorer countries will be left far behind.
• Market Panic: If AI systems make a mistake or get out of control, they could cause huge crashes in the global share markets.

4. What Should the Government Do?

To survive this AI tsunami, countries need to take fast action:

• Change the Education System: Students should not just memorize fixed skills. They need to “learn how to learn” so they can easily adapt to new tools and software.
• Social Support: The government must provide financial help and retraining programs for people who lose their jobs to computers.
• Build Digital Infrastructure: India must keep investing in digital public goods (like cheap internet and digital training centres) to stay ahead.

UPSC Value Box

Key Topic	Simple Explanation for UPSC
Viksit Bharat	India’s grand national goal to become a high-income, fully developed country by the year 2047.
IMF	The International Monetary Fund is a major global body that watches over the world’s economy and helps countries in financial trouble.
Job Impact Data	AI will impact 60% of workers in advanced economies and 40% in emerging markets like India.

Q. With reference to the macroeconomic impacts of Artificial Intelligence as highlighted by the International Monetary Fund (IMF), consider the following statements:

1. Artificial Intelligence is expected to impact a higher percentage of jobs in emerging markets compared to advanced economies.
2. The widespread use of AI carries the risk of widening the economic inequality gap between nations.
3. The IMF estimates that AI adoption can lift global economic growth by nearly 0.8 percent annually.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

Correct Answer: (b)