Budget 2024 expectation- Govt’s stance on AI – Will govt’s ‘AI push’ be visible in Budget document-

Budget 2024 expectation: Govt’s stance on AI – Will govt’s ‘AI push’ be visible in Budget document?

India is emerging as a powerhouse in the AI and analytics space with growing tech and digital talent with a push from the government. The central and multiple state governments too have launched various schemes to push AI adoption in India. Some of these schemes/initiatives are “AI for all” by Niti Ayog and Chair at GPAI in the current G20 summit. MeitY also plans to launch IndiaAI, Bhasini Programme, and YuvAI for skilling Indian youth by the central government. Similarly, multiple state government schemes (notably Tamil Nadu, Telangana, and Karnataka) have been launched to grow and develop skills, propel India Inc and investments in this area, and regulate and govern the use of AI.

With such focus on AI, the central government is expected to make few announcements in the favour of AI adoption and integration across businesses and governance systems. Finance Minister Nirmala Sitharaman will be presenting the interim Budget for fiscal year 2024-25 on February 1, 2024. This would be her sixth consecutive budget since 2019.

While multiple initiatives have been introduced to make a global AI hub, per a Deloitte report, a few areas need to be considered. “First, accelerate programme execution. AI research and such programmes are being launched by almost all mature countries. It is a topic of innovation where speed matters. Second, start reaping the benefits by launching specific programmes under Public-Private Partnership (PPP) with crowd-sourcing ideas, strict timelines, and scaled-up solutions for the country. Third and possibly most critical is the focus on the two foundational elements of AI – data (collection, storage, and analytics) and trustworthy use of AI,” Deloitte partners Debashish Banerjee and Shrenik Shah said.

What are the key expectations for AI from Budget 2024?

Per the report by Deloitte, the government should boost investments in AI and identify new research areas, such as quantum computing in AI, digital nudge for social good using AI, Explainable AI (XAI), Gen Chem and Computational Biology, and smart and connected cities. It said that the governments’ role in promoting academia-industry collaboration will be key. “A dedicated pool of officers across direct and indirect taxes should have requisite knowledge of AI and its use. This will enable them to use AI in tax assessment, tax administration, and taxpayer facilitation,” said Debashish Banerjee.

Further, it said that India’s AI strategy focuses on social impact and has called out three sectors as a priority – agriculture, education, and healthcare. The key is to identify specific use cases that the government can implement and these cases should have the maximum impact on the society at large. List the key challenges in these sectors, crowd-source ideas, implement those ideas (possibly under the PPP model with value-based impact), and scale the solution to be the service provider to the globe. Some ideas, it added, could be, digitising lawsuits and judgements in the tax area, and implementing a triage model using efficient reviews on tax, property, marital, and other easy-to-review litigations; using lifestyle-based data to predict future health score; digital nudge using AI to prevent fraud on government schemes; quality education in local languages for rural India using LLMs specific to Indian languages; and use of satellite images from ISRO on the crop insurance claims process to make it easy for farmers.

While the government has taken various steps in terms of centralised data repositories for the country, with Adhaar, CoWin, portability of insurance policies, and multiple other initiatives, it is required to take further steps in order to boost AI and analytics further.

Also, there is a need for establishing a governance mechanism to ensure trustworthy AI, covering everything from data sourcing and storage to the application of AI methods.

Policy recommendations

Although the Digital Personal Data Protection Act (DPDP) is a great beginning, the industry needs a deeper dive to ascertain how each industry is using personal data and keeping a balance between fostering innovation and regulating data use. “India must introduce penalties for unethical use, helping it shape up its image as a global AI hub. India’s diversity, cultural identity, and values should be considered while drafting policies on AI,” said Shrenik Shah.

There is also a need to craft a committee/programme that will task each government department to prioritise innovation using AI in their respective areas.

Further, AI technology can be used to sharpen the tax administration’s decision-making process, around filing or not filing an appeal, based on key parameters. “With the use of Generative AI, tax administrators can summarise tax positions based on facts of the case, legal interpretations, and views of the courts. The use of AI can also help assess winning/losing probabilities for a case, for the tax administration. This can help authorities decide whether to pursue a particular case in litigation or not. AI can help decide whether to litigate a case and optimise the number of cases, saving time and energy of the tax administration,” the Deloitte report stated.

And finally, Deloitte said that there is a need to design a central committee of AI/ML experts in India whose role will be on standardising the curriculum for masses and suggesting/investing on new unexplored technologies.