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In a thought-provoking address in the Rajya Sabha, AAP leader Raghav Chada raised an important question about India’s position in the rapidly evolving artificial intelligence (AI) landscape. As nations like China and the United States surge ahead with groundbreaking AI models—China’s DeepSeek and the US’s ChatGPT—India finds itself struggling to keep pace. While these countries lead in AI patents and innovations, India’s contribution remains modest, raising concerns about our future competitiveness in the global AI race.
India holds just 0.5% of global AI patents from 2010 to 2022, while the United States commands 60% of the global market share in AI innovation. China follows with 20%, leaving India trailing far behind. This stark contrast emphasizes India’s lag and highlights the urgent need for policy interventions, investments, and strategic planning to steer the nation into the AI age.
However, India faces a pressing challenge. Despite being the fifth-largest economy with a GDP of $3.73 trillion, it struggles with deep socio-economic issues. The healthcare system, for example, only receives 2.6% of the GDP in government funding—well below the 14% that wealthier nations like the U.S. allocate to this sector. This presents a dilemma: Should India invest heavily in AI, or should it direct resources to basic services such as healthcare, where the situation remains dire?
The U.S. serves as a cautionary tale in this context. Despite its high GDP and substantial healthcare spending, it continues to grapple with a “broken” healthcare system. For India, investing in AI at the expense of vital sectors like healthcare could be seen as an economic misstep, especially given the country’s lower GDP per capita and widespread poverty.
To strike a balance, India should consider an innovative, holistic approach. One solution could involve the government launching a national health insurance program that allows citizens to pay according to their income. Premiums could start as low as ₹10 per month for low-income families, ensuring that healthcare is accessible to all. By introducing a system where the entire population contributes to healthcare, even small contributions could generate significant funds. If 1 billion Indians paid ₹100 per month, and 400 million paid ₹10 per month, the government could generate approximately ₹140 billion (₹14,000 crore) monthly, or about $1.27 billion USD. This is more than the total revenue generated from income tax or corporate tax in India, offering a steady, substantial stream of funding for healthcare without raising indirect taxes.
In addition, the government could also partner with public-private partnerships (PPP) with tech companies, such as server farm giants like Hostinger, to improve the performance and speed of government websites. These partnerships could help streamline essential services and introduce a new sub-website called “Modern”. This platform could be dedicated to individuals who didn’t skip the computer phase in India, offering cutting-edge educational resources, AI-related training, and career opportunities to bridge the digital divide and ensure that India’s workforce is equipped for the future.
Moreover, India should focus on AI in agriculture, where nearly 50% of the workforce is employed. The government could offer farmers land, resources, and training to integrate AI into their farming practices. Precision farming technologies powered by AI could increase agricultural productivity while reducing the reliance on traditional methods. This initiative would not only empower rural farmers but also contribute significantly to India’s economic growth.
India must also increase its AI investments. Presently, the nation allocates approximately $1.2 billion annually for AI initiatives. To compete globally, India should target an annual AI budget of at least $12 billion over the next five years, a tenfold increase. This investment should focus on AI research, infrastructure, and partnerships with private and academic sectors to foster innovation.
At the same time, India’s healthcare expenditure should rise to at least 3.5% of GDP in the short term, with a long-term goal of reaching 5% by 2030. AI should be integrated into healthcare to streamline services, reduce costs, and improve patient outcomes. AI-powered diagnostic tools, telemedicine platforms, and hospital automation systems can revolutionize healthcare delivery in rural and underserved areas.
Private sector initiatives like Apollo Hospitals’ AI integration can serve as a model for improving efficiency in healthcare. By automating routine tasks, AI can help reduce operational costs while improving service delivery, especially in resource-constrained settings.
In conclusion, India stands at a critical juncture in the AI race. While the U.S. and China have established their dominance, India has a unique opportunity to leverage both AI and socio-economic development. Through smart investments in AI, public-private partnerships, and targeted healthcare reforms, India can secure its place as a global leader in AI while ensuring that no citizen is left behind. By creating an inclusive ecosystem that integrates technology into sectors like healthcare, agriculture, and education, India can accelerate its economic growth and pave the way for a prosperous, tech-savvy future.
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