No Robot Tax, But Budget 2024 Likely to Address Concerns of Job Losses Due to AI

The General Budget 2024 to be presented on July 23 is not likely to make any provision for a robot tax. There is demand for this from some quarters, specially from the Swadeshi Jagran Manch, which, upon meeting Finance Minister Nirmala Sitharaman, suggested such a tax.

Its head Ashwani Mahajan told News18, “While we need new technologies and India is a leader in this, we also need to find a way out to address the concerns and help those who may lose their jobs because of new technologies like AI.”

Sources in the Finance Ministry have made it clear that such a tax which suggests that it be imposed on those companies and corporates who are opting for the new technologies like AI and could lead to job losses or less hiring should compensate, could be in the form of what is called robot tax, is unlikely to be accepted. A source told News18 this would needlessly spread panic, but, the government is concerned about it.

But Budget 2024 will address three concerns – AI, deeptech and machine learning. Machine learning is a branch of AI which focuses on using data and algorithms to enable AI to imitate the way humans think and perform. Deeptech is a generic term for technologies including Artificial Intelligence, robotics, blockchain, biotech. Sources say that in Budget 2024, the government will address and refer to all these three matters and reassure people that the government is looking at ways to ensure people don’t lose jobs or that alternatives are found. One solution which was mulled was corporates will be given suggestion that they can go in for a mix where only a specified percentage of jobs would be affected by AI.

A recent IMF paper has urged countries to factor in this concern over AI, deeptech. It argues that “the fiscal policy has a major role to play in supporting a more equal distribution of gains and opportunities from generative AI. But this would require significant upgrades to social protection and tax systems around the world.”

The government and Budget are focusing on jobs and the AI sword is dangling over them. While no one can escape the AI reality any more, in a labour intensive economy like India, no chance can be taken.