Robot Tax Unlikely in India’s Upcoming BudgetRobot Tax Unlikely in India’s Upcoming Budget Despite calls from some quarters, the Indian government has indicated that it is unlikely to introduce a “robot tax” in the upcoming 2024 General Budget. The proposal, made by the Swadeshi Jagran Manch, aimed to address concerns about potential job losses due to the adoption of new technologies like artificial intelligence (AI). However, sources in the Finance Ministry have dismissed the idea, arguing that it would create unnecessary panic. Government’s Focus on Jobs The government is reportedly concerned about the impact of AI and other deep tech advancements on employment. However, it plans to address these concerns through other measures rather than a specific tax. The Budget is expected to acknowledge AI, deep tech, and machine learning, while emphasizing the government’s commitment to finding ways to protect jobs and explore alternative employment options. One suggestion is to encourage companies to adopt a mixed model where a limited number of jobs are affected by AI. International Perspective An International Monetary Fund (IMF) paper has highlighted the need for countries to address concerns about AI and deep tech’s impact on job distribution. It argues that fiscal policies can play a role in promoting a more equitable distribution of opportunities. Labor-Intensive Economy India, as a labor-intensive economy, is particularly sensitive to the potential job losses associated with AI. As a result, the government is cautious about taking any risks that could harm the employment market.
The General Budget 2024, to be presented on July 23, is unlikely to make any provision for a robot tax. There has been demand from some quarters, notably the Swadeshi Jagran Manch, which, after a meeting with Finance Minister Nirmala Sitharaman, proposed such a tax.
The organisation’s head, Ashwani Mahajan, told News18: “While we need new technologies and India is a leader in this, we also need to find a way to address the concerns and help those who are at risk of losing their jobs due to new technologies like AI.”
Sources in the Finance Ministry have made it clear that such a tax, which suggests that it would be imposed on those companies and businesses opting for new technologies like AI and could lead to job losses or less recruitment, in the form of what is being called robot tax, is unlikely to be accepted. A source told News18 that this would create unnecessary panic, but the government is concerned about it.
But Budget 2024 will address three concerns: AI, deep tech and machine learning. Machine learning is a branch of AI that focuses on using data and algorithms to enable AI to imitate the way humans think and perform. Deep tech is a general term for technologies such as artificial intelligence, robotics, blockchain and biotechnology. Sources say that in Budget 2024, the government will address and refer to all three of these issues and assure people that the government is looking at ways to ensure that people do not lose their jobs or that alternatives are found. One solution that was being considered was that companies are being suggested that they can go for a mix where only a certain percentage of jobs would be affected by AI.
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A recent IMF paper has urged countries to take these concerns about AI, deep tech into account. It argues that “fiscal policy has an important role to play in supporting a more equal distribution of gains and opportunities from generative AI. But this will require significant upgrades to social protection and tax systems around the world.”
The government and Budget are focused on jobs and the AI sword is hanging over their heads. While no one can escape the AI reality anymore, in a labor-intensive economy like India, no risk can be taken.
A recent IMF paper has urged countries to take these concerns about AI, deep tech into account. It argues that “fiscal policy has an important role to play in supporting a more equal distribution of gains and opportunities from generative AI. But this will require significant upgrades to social protection and tax systems around the world.”
The government and Budget are focused on jobs and the AI sword is hanging over their heads. While no one can escape the AI reality anymore, in a labor-intensive economy like India, no risk can be taken.
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Pallavi Ghosh
Pallavi Ghosh has been covering politics and parliament for 15 years and has reported
first print: Jul 16, 2024, 08:38 AM IST
