Sitharaman Stresses Need for Responsible AI Rules, Not Tech-Stifling Regulations

New Delhi: Union finance minister Nirmala Sitharaman on Monday emphasised the need for regulations that foster technology innovation in a responsible manner, particularly in artificial intelligence (AI), rather than stifling it. “We do not want regulation that literally wipes out technology itself. We want regulations because we want a responsible application,” she said.

The finance minister’s statement comes soon after the release of Niti Aayog’s report on artificial intelligence in the national capital here. The report has predicted that accelerated adoption of AI across all the sectors in the country can contribute $500-600 billion to India’s GDP by 2035 on the back of increased productivity and efficiency in the workforce.

The report titled as ‘AI for Viksit Bharat’ also noted that over the next decade, the accelerated economic growth with the adoption of AI across sectors is expected to add $17-26 trillion to the global economy. “India's combination of a large STEM workforce, expanding R&D ecosystem, and growing digital and technology capabilities position the country to participate in this transformation, with the potential to capture 10-15 percent of global AI value,” the report said.

Observing that AI is not static, Sitharaman said that it is rapidly progressing, real-time and dynamic. “Therefore, all of us will have to be conscious that we don’t sit back on ethics. We need to be clear that regulation has to run the race equally as much as the technology is running it. If the technology is on a sprint, the regulation has to be on the sprint, too,” she said.

“Sandboxes provide a testing ground for regulatory mechanisms, enabling a balanced approach that fosters innovation while ensuring necessary oversight and this helps prevent over-regulation that could kill the technology itself. India is a country which can understand the implication of a good which comes in our way, although a good is never unmitigated, a good is never without riders, a good is never - on its own - good, it is for us all to use in such a way that it is for the common good,” she added.

According to the Aayog, projections show that while AI will create many new roles, it will also displace many existing jobs, particularly in clerical, routine, and low-skill segments. “The analysis also shows that financial services and manufacturing can be most impacted and might have up to 20-25 per cent of their sectoral GDP attributed to AI by 2035,” it said.

“The AI-led productivity and efficiency improvement could unlock $50-55 billion in financial services, over and above the current estimated growth for the sector by 2035. AI could power automated compliance, fraud detection, and risk management through advanced anomaly detection techniques and privacy-preserving analytics such as secure multi-party computation and federated learning,” the report said.

Speaking at the occasion, minister of electronics and information technology Ashwini Vaishnaw also said, “We are passing through very interesting times when the world is going through so much of turbulence, India is very stable growing at a consistent rate and it is driven by technology and technology is the fundamental base of this growth,” Vaishnaw said, adding that over a period of last few decades, the biggest change which has happened, and the biggest factor which has joined this constellation of technologies, is AI that is now affecting practically everything that we do.

However, Niti Aayog CEO BVR Subrahmanyam also said that if India is to accelerate its growth to the 8 per cent annual rate required for the realisation of Viksit Bharat, we have no option but to significantly raise productivity across the economy and unlock new growth through innovation. Artificial Intelligence can be the decisive lever.

“With a focused and sector-specific approach, industries such as banking and manufacturing can deploy Al today to improve efficiency, service quality, and competitiveness creating momentum for deeper transformation. At the same time, India must nurture frontier innovation, from Al-enabled drug discovery to software-defined vehicles, building the next engines of growth,” Subrahmanyam said.