Economic Survey Flags AI-Led Global Shock, Warns of Risks to India’s IT and White-Collar Jobs

The Economic Survey 2025–26 has cautioned that a worst-case global crisis triggered by rapid and unregulated advances in artificial intelligence (AI) could cause economic disruption more severe than the 2008 global financial crash, posing significant risks to India’s IT sector and white-collar employment.

The survey, tabled in Parliament ahead of the Union Budget, highlights growing global economic fragility and warns that technological shocks — when combined with geopolitical tensions and financial instability — could amplify systemic risks. It notes that AI-driven automation and productivity shocks may disproportionately affect service-driven economies, including India, where a large share of employment is concentrated in IT services, business process management, and other knowledge-based sectors.

According to the survey, unchecked deployment of AI systems could lead to large-scale displacement of cognitive and clerical jobs, disrupt global labour markets, and weaken demand in technology-dependent economies. It stresses that such disruptions, if poorly managed, could deepen inequality and strain social and economic safety nets.

The document underscores the need for robust regulatory frameworks, ethical guardrails, and large-scale reskilling initiatives to ensure that AI adoption supports sustainable growth rather than triggering economic instability. It also calls for coordinated global action to manage AI-related risks, warning that fragmented governance could worsen the impact of a technology-driven shock.

While acknowledging AI’s potential to boost productivity and innovation, the Economic Survey emphasises that policy preparedness will be critical in determining whether AI becomes a growth driver or a destabilising force in the global economy.