As India charts its course towards becoming an Artificial Intelligence (AI) powerhouse, the Union Budget for 2024-25 assumes crucial importance, building on the substantial foundation laid in the last fiscal. The budget is likely to aim to strengthen the country's AI sector for sustainable growth, with a focus on ethical safeguards, skill-building programs and support mechanisms for startups.
Ethical AI Practices: Governance and Regulation
Recognizing the potential biases that AI systems can inherit from non-uniform data distributions, the need for budget rules can be emphasized. Governance regulations to establish ethical standards for AI developers and companies. Drawing inspiration from the Digital Personal Data Protection (DPDP) Act, the government is likely to look at framing clear guidelines for meaningful use of personal data, protecting against malicious algorithms and deepfakes, reports Financial Express.
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Inclusion of governance tools such as model cards is suggested to prevent misuse of AI solutions. These briefs include key information about the model's use, intent and performance, ensuring transparency and ethical use. In addition, the establishment of a regulatory body that leverages industry experts to address inconsistent AI use and ethical violations may be proposed.
Strategizing India's Global AI Position
The AI industry, with an estimated annual growth rate of 30 percent, will play a key role in driving India towards its ambitious goal of a $5 trillion economy. Leveraging AI promises significant improvements in various fields, from reducing backlogs of legal cases and increasing tax compliance to predicting disease risks and detecting fraud in government schemes.
There is a unique opportunity in the budget to implement Public-Private Partnership (PPP) models, optimize infrastructure and focus on centralized data repositories to enhance integrity, trust and controlled access.
Prospects for AI education and skill development
Building on the momentum created in Budget 2023, the government may allocate resources for AI Centers of Excellence (CoEs) in educational institutions. Established at a significant cost, these CoEs encourage partnerships between industry and academia, promoting interdisciplinary research and solutions in key areas such as healthcare, agriculture, education and sustainable infrastructure.
Recognizing the need for increased education spending, the budget will improve AI-based vocational training. It will empower the wider workforce, including those in Tier-2 and 3 institutes, to meaningfully contribute to civil services through the application of AI.
Supporting AI Startups: Financial Incentives and Tax Exemptions
The National DeepTech Start-up Policy (NDTSP), framed in 2023, remains a key tool for stimulating innovation and economic growth in the AI startup landscape. Despite challenges in the global macroeconomic environment, AI startups have demonstrated resilience.
There are financial incentives and tax exemptions for AI startups for Budget 2024-25. The positive impact of the Startup India initiative has been recognized and further support is sought through measures to address taxes, carry-forward losses, investments and employee stock options. Funding mechanisms such as the Startup India Seed Fund Scheme (SISFS) along with encouragement of AI adoption in various sectors are expected to boost the growth of AI startups operating in tier-2 and 3 cities in particular.