IIT Madras Study Examines Unequal Labour Market Impacts of Artificial Intelligence in India

A whitepaper published by the Centre for Responsible AI at the Indian Institute of Technology Madras has highlighted how the deployment of artificial intelligence is transforming employment in India. Titled How AI Is Reconfiguring Work in India: A Task-Based Framework for Understanding Augmentation, Displacement, New Roles and the Changing Structure of Jobs, the study warns that the risks and transitional burdens of automation fall unevenly across different segments of the national workforce.

Relevance for UPSC Aspirants

Understanding the socio-economic impacts of emerging technologies is critical for General Studies Paper III (Science and Technology as well as Indian Economy and Employment). The findings provide structured arguments regarding workforce disruption, algorithmic governance in the workplace, MSME competitiveness, and the transition risks confronting entry-level white-collar workers and the informal sector.

Key Findings and Structural Implications

• Threat to Entry-Level Career Pipelines: Entry-level positions in sectors such as information technology, business process outsourcing, and finance historically functioned as informal apprenticeships where fresh graduates developed domain competence. By automating routine responsibilities like standard coding, password resets, and basic contract reviews, AI threatens to shrink the traditional talent pipeline unless roles are redesigned around supervising automated systems.
• Disparities in Enterprise Adoption and Language: Large corporations possess the resources to absorb fixed costs and tailor advanced models, whereas micro, small, and medium enterprises must depend on narrow, subsidised applications. Furthermore, current AI tools underperform in nuanced, code-switched regional Indian languages compared to English.
• Workplace Monitoring and Job Quality: While automation spawns niche positions such as robot operators and escalation handlers, it remains uncertain whether these roles ensure steady wages or precarious piecework. The paper raises concerns over heightened worker surveillance, performance scoring dashboards, and cognitive burnout resulting from staff managing only high-friction exceptions.
• Spillovers into the Informal Economy: Although the informal sector employs the vast majority of Indian labour, it faces indirect repercussions. AI-driven job losses in formal tech hubs can dampen consumer spending on local service providers, while algorithmic credit evaluation risks excluding individuals who lack digital footprints.