AI poses a stress test to state capacity, says CEA Nageswaran

During the AI Summit 2026, Chief Economic Advisor (CEA) V. Anantha Nageswaran highlighted the critical challenges posed by artificial intelligence (AI) to India's state capacity. He warned that if AI technology advances at a pace that outstrips the ability to retrain the workforce, there could be significant economic and social repercussions. Nageswaran emphasized three main risks: the potential for AI to displace jobs faster than new skills can be developed, the possibility of rising productivity without corresponding job creation, and the concern that institutional reforms may not keep pace with technological advancements. These factors, he cautioned, could jeopardize India's demographic dividend—a unique opportunity for economic growth fueled by a large, young population. Nageswaran's remarks underscore the urgent need for a strategic approach to AI integration that includes workforce training, policy reform, and fostering a conducive environment for technological adoption, to ensure that India does not miss out on its demographic advantages in the face of rapid AI development.