14 - 06 - 2026

Govt pushing reskilling as AI disrupts jobs market: Finance Minister

India’s labour market is undergoing a significant transformation as artificial intelligence begins to automate tasks previously performed by workers, Finance Minister Nirmala Sitharaman acknowledged on Sunday, offering one of the clearest signals yet from New Delhi that the government sees AI as both an economic opportunity and a source of disruption.

Speaking in Bengaluru, the country’s technology capital, Sitharaman said companies across sectors were increasingly deploying AI-driven systems, creating what she described as a “churn” in employment patterns and prompting a policy focus on reskilling and workforce adaptation.

“A churn is happening because industries are now using AI to get results which earlier were done by people,” she said, adding that the government was expanding training and upskilling programmes to help workers adjust to changing industry requirements.

The remarks come as Indian technology services companies, global capability centres and multinational corporations accelerate investments in generative AI and automation tools, fuelling concerns about the future of entry-level and routine white-collar jobs in one of the world’s largest labour markets.

While governments and corporate leaders globally have promoted AI as a driver of productivity and economic growth, the technology’s impact on employment remains a subject of intense debate. Sitharaman’s comments suggest policymakers are increasingly recognising the adjustment costs associated with the transition.

At the same time, the Finance Minister sought to reassure investors about the broader health of the economy, dismissing opposition warnings of an impending economic crisis and arguing that key indicators continued to point towards resilience.

India remains the world’s fastest-growing major economy, she said, citing growth across manufacturing, agriculture, services, logistics and transport. The comments were a direct rebuttal to Congress leader Rahul Gandhi, who has repeatedly warned of economic distress and unemployment pressures.

Sitharaman also defended India’s macroeconomic position amid concerns over the rupee’s performance against the US dollar. She said currency movements were being shaped primarily by external factors, including shifts in US monetary policy, geopolitical uncertainty and global capital flows.

“The Reserve Bank intervenes only to manage volatility and not to fix the exchange rate,” she said, noting that several Asian currencies, including the Japanese yen and South Korean won, had experienced similar pressure against the dollar.

Her comments underscore the challenges facing policymakers as India navigates an increasingly uncertain global environment marked by geopolitical tensions and volatile commodity markets.

Sitharaman pointed to India’s dependence on imported crude oil, fertilisers and gold as structural pressures on foreign exchange demand. The country’s fertiliser subsidy bill, in particular, remains elevated after a surge in global prices following the pandemic and subsequent supply disruptions.

“A fertiliser bag that costs nearly Rs 3,000 internationally is still being made available to farmers at around Rs 300,” she said, highlighting the scale of state support aimed at shielding the agricultural sector from global price shocks.

The Finance Minister also used the occasion to sharpen criticism of the Congress government in Karnataka, questioning the long-term sustainability of its expansive welfare guarantees and arguing that states should avoid making spending commitments beyond their fiscal capacity.

She further challenged the state’s contention that it was being short-changed by the federal government, claiming Karnataka had failed to utilise Central schemes designed to support farm infrastructure, including warehouses and cold-storage facilities.

According to Sitharaman, viability-gap funding and concessional financing remain available for Farmer Producer Organisations seeking to build post-harvest infrastructure, but Karnataka has yet to submit sufficient proposals to access the support.

The intervention reflects a broader political and fiscal debate over the balance between welfare spending, capital investment and federal resource allocation, a discussion likely to intensify as states grapple with competing demands on public finances.

Yet it was Sitharaman’s remarks on artificial intelligence that stood out as the most consequential. As India seeks to position itself as both a global technology hub and a source of skilled labour, policymakers face the challenge of ensuring that the gains from automation are not accompanied by widening employment dislocation.

The government’s response, Sitharaman suggested, will rely less on resisting technological change and more on preparing workers for it.

“Technology will continue to evolve,” she said. “Our effort is to ensure that people receive the skills required to participate in the opportunities created by this transformation.”

For an economy seeking to sustain rapid growth while creating millions of jobs, the acknowledgement that AI is already reshaping the labour market may prove to be one of the most significant economic messages to emerge from the minister’s Bengaluru visit.