AI for Inclusive Societal Development | 10 Oct 2025

Source: PIB 

Why in News?  

NITI Aayog released a study titled “AI for Inclusive Societal Development”, a first-of-its-kind effort to systematically explore how Artificial Intelligence (AI) and frontier technologies can be harnessed to transform the lives and livelihoods of India’s informal workers. 

• The report proposes a National Mission “Digital ShramSetu”, envisioned as a technology-driven bridge to formalize and uplift the informal workforce.

What is the Mission Digital ShramSetu?

• About: Mission Digital ShramSetu is a transformative initiative proposed by NITI Aayog to digitize and empower India's informal workforce by leveraging cutting-edge technologies like AI, blockchain, robotics, and immersive learning. 
• Objectives:  
  • Empowerment Through Technology: Utilize technology to create verifiable digital identities for workers, enabling access to timely payments, skill certifications, and social security benefits. 
  • Inclusive Skilling: Develop adaptive, multilingual, and offline-compatible training modules to upskill workers. 
  • Federated Credentialing System: Establish a decentralized trust model allowing training providers, employers, and government bodies to issue and verify worker credentials in real-time. 
  • Smart Contracts for Fair Compensation:  Implement blockchain-based smart contracts to ensure transparent and timely payments to informal workers, reducing disputes and delays. 
  • Grassroots Innovation and Outreach: Encourage state-level programs and partnerships with local institutions to promote digital literacy and facilitate the adoption of technology. 
• Governance and Structure: 
  • Apex Governing Body: Chaired by the Prime Minister, with key ministries involved in policy and budget decisions. 
  • Sectoral Task Forces: Focused on sectors like agriculture, healthcare, retail, and construction, tasked with solution design and implementation. 
  • State Coordination Units: To ensure local adaptation and effective on-ground execution. 
• Targets:   

What is the Current State of Informal Workers in India? 

• Informal Workforce Size: Around 490 million people, representing about 85% of India’s total labour force. 
• Economic Contribution: The informal sector contributes roughly 45% of India’s Gross Domestic Product (GDP). 
• Productivity Levels: Average productivity of informal workers is around USD 5 per hour, less than half the national average of USD11 per hour. 
• Per Capita Income: The average informal worker earns about USD 1,800 per year (2025). 
• Female Workforce Participation: Women’s participation in the informal trade sector remains very low at 15% (excluding agriculture), compared with 37% national average and 47% global average. 
• Social Protection Coverage: Only 48% of informal workers currently have access to social security benefits.

What are the Challenges Faced by the Informal Workforce? 

• Financial Fragility and Volatility: The lack of formal contracts and trusted identities causes delayed or inconsistent wages, leading to financial instability.  
  • Additionally, the absence of verifiable income and complex loan procedures prevent workers from accessing timely finance, while reliance on exploitative informal lending sources with high-interest rates further exacerbates their financial challenges. 
• Market Access and Demand Linkages: Informal workers operate on the fringes of the market, with no consistent demand, or digital presence, resulting in chronic income instability and underemployment. 
  • Migrant workers face difficulties finding work across regions because they don't have portable digital identities or job-matching systems, leading to exploitation by intermediaries. 
• Skilling and Adoption: Many informal workers rely on traditional, outdated methods and lack access to formal training, which limits their growth and productivity. 
  • Formal and adaptive training programs are scarce, and low digital literacy and inaccessible tools make it difficult for workers to adopt new technologies, further hindering their professional development. 
• Social Protection and Occupational Safety: Workers struggle to benefit from social schemes due to a lack of awareness, digital barriers and non-portable records. 
• Productivity Gaps:  The lack of workflow optimization and access to digital tools results in wasted effort, low productivity, and no performance visibility, which directly impacts income potential. 

How AI Technology can Transform Informal Livelihoods?

Conclusion 

NITI Aayog underscores that Viksit Bharat 2047 cannot be realized without empowering its informal workforce. AI must not replace human labour - it must enhance it. Timely action through Digital ShramSetu can ensure that India’s growth story becomes not only one of technological progress but of inclusive prosperity, where every worker, formal or informal, stands as a catalyst of development.