Industries with AI to propel India to 3rd-largest economy: FM Sitharaman

FM says adoption of tech could have accelerated productivity gains

 

The industries that will play a key role in propelling India to become the third-largest economy in the world will largely be those that adopt artificial intelligence (AI), Union Finance Minister Nirmala Sitharaman said on Thursday.

 

Interacting with students at an Institute of Economic Growth event, the FM said: “They can be any industry. Productivity gains and the efficiencies that you are bringing in because of the adoption of such technology is what is going to define these industries, which will rapidly allow India to move to the third position.”

 

According to estimates by the International Monetary Fund, India will become the fastest-growing major economy in the world in FY25 and is expected to overtake Japan to be the fourth-largest economy in 2025.

 

Highlighting how India’s productivity had not caught up with its ambition to grow fast, Sitharaman said: “I am not saying there was never an attempt to improve, but trying has not been facilitated with many other changes that could have been adopted. Technology is one of them.”

 

The adoption of technology, the FM said, could have accelerated productivity gains. She said the defining feature of the transformation in some sectors is the adoption of technology, including Web3. 

 

The finance minister said that the way India’s common people have taken to digital financial transactions has amazed the world. “India has not seen the digital revolution in just one creamy layer. It has seen it vertically as well as horizontally all over the country.”

 

She highlighted that while optical fiber had already reached every district in the country, effective power supply had to be coordinated with the states.

 

She also stressed that in the post-Covid-19 period, all states have been spending on social schemes and welfare, but everybody is made to spend on capital expenditure also. “All states are now understanding the importance of capital expenditure because the multiplier effect is much higher,” she said.

 

The FM said a key lesson from the Covid-19 pandemic is the need for the country to be prepared for future pandemics. “Institutions will have to be ready for them; not just hospitals or disaster management teams but also schools, colleges, firefighting units.”