Artificial Intelligence is rapidly transforming global labour markets, and according toKristalina Georgieva, India may be one of the countries best positioned to benefit — if it acts wisely.
In an exclusive interview, theInternational Monetary Fund (IMF)chief said early data shows AI is already having a positive impact on employment in several countries. However, those gains are uneven. Workers with AI-enhanced skills are earning more, while middle-income roles are beginning to shrink.
Georgieva pointed to the United States as an early indicator. Around one in ten US jobs now require AI-related skills — and those roles command higher salaries. Increased earnings are driving spending in sectors like hospitality, restaurants, and entertainment, boosting lower-skilled service jobs.
But the middle layer of the workforce is being squeezed. Automation is erasing many entry-level roles, creating uncertainty for recent graduates. “We also see automation eliminating entry-level jobs. So recent graduates worry, where is the job for me?” she noted.
This shift risks deepening income inequality unless policymakers respond proactively.
Georgieva stressed that governments are “not helpless” in the face of AI disruption.
Her first recommendation: overhaul education systems. Workers must learn how to learn, stay adaptable, and continuously upgrade skills. Static career paths will no longer work in a rapidly evolving AI economy.
Second, countries must strengthen social safety nets. She highlighted Denmark’s “flex security” model — combining labour market flexibility with strong worker protections — as an example of how to balance innovation with security.
According to Georgieva, India’s digital public infrastructure is its greatest advantage. Massive investments in digital systems, including a nationwide digital ID framework covering 1.4 billion people, have laid the groundwork for broader AI access.
She described India’s approach of building AI solutions tailored to specific public needs as “impressive” and suggested it could serve as a model for other developing nations.
The IMF estimates AI could lift global growth by about 0.8%, potentially pushing global expansion above the current 3.3% average. But Georgieva warned that growth without safeguards could worsen inequality and erode public trust.
“We want AI for good, not for evil. We want AI that protects dignity and the rights of humans,” she said.
Countries must build ethical frameworks and sensible guardrails without stifling innovation. Excessive regulation, she cautioned, can suffocate progress just as much as unchecked expansion can create harm.
On global trade tensions, Georgieva noted that while US tariffs initially disrupted markets, countries adapted by strengthening regional and bilateral partnerships.
“Trade is like water. You put an obstacle, it goes around it,” she said, adding that in today’s multipolar world, global economic interdependence is irreversible.
Georgieva’s message is one of balance. AI presents enormous opportunity — higher productivity, stronger growth, and better jobs for those prepared. But it also carries risks: shrinking middle-income roles, entry-level job erosion, and widening inequality.
For India and the world, the path forward lies in investing in skills, modernising education, strengthening worker protections, and building smart guardrails.
