- India
- Oct 09
Harnessing frontier technologies to transform lives of informal workers
• NITI Aayog released a study, titled ‘AI for Inclusive Societal Development’, in 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.
• India’s informal sector contributes around 45 per cent of the GDP, playing a critical role in the economy.
• While global discourse on AI has largely centered around white-collar jobs and the formal economy, this study shifts the spotlight to the informal sector.
Informal workforce scenario
• Around 90 percent of India’s labour force operates in the informal sector, powering essential industries such as construction, agriculture, logistics, retail and artisanal manufacturing.
• Yet, despite their vital contribution to the economy, trade workers’ productivity, measured as per capita income per hour, remains around $5 per hour, almost half of the overall average of $11 per hour, reflecting persistent gaps in access to tools, training and support systems.
• Trapped in low-wage, low-productivity roles without job security, structured training or social protection, these workers cannot contribute optimally or realise their full potential.
• Women’s participation in the workforce is at 37 per cent, compared with a global average of 47 per cent, further eroding overall productivity and economic resilience.
• Many workers shoulder unpaid caregiving and domestic responsibilities, such as elder care, household management, and children’s education.
• This invisible labour, though central to the social and economic fabric, remains unrecognised in productivity metrics and limits time for paid employment or skill development.
Distribution of informal trade workforce by sector
i) Agriculture and allied activities (46-48 per cent): Cultivators, agricultural labourers, livestock handlers, horticulture workers.
ii) Construction and infrastructure (15-17 per cent): Construction workers, painters, masons, heavy equipment operators, fabricators/welders, carpenters, electricians, plumbers.
iii) Civic, domestic and healthcare services (8-10 per cent): Domestic workers, ASHA workers, sanitation workers, nurses, lab technicians, home healthcare aides.
iv) Retail and food services (6-8 per cent): Kirana store owners, super/hyper mart workers, waiters, street food vendors, dhaba workers.
v) Manufacturing and industrial activities (4-6 per cent): Manufacturing workers, machine operators, packaging workers, miners.
vi) Artisans (2-4 per cent): Diamond cutters, potters, blacksmiths, handloom weavers, leather workers, stone carvers, tailors, toolkit makers, goldsmiths, cobblers, coir weavers, doll and toy makers, barbers, armourers, fishing net makers, locksmiths.
vii) Logistics and transportation (3-5 per cent): Delivery drivers, heavy vehicle drivers, cab/commercial drivers, autorickshaw drivers.
viii) Others (7-10 per cent): Unorganised educators, textile workers, tour guides, aquaculture workers, repair technicians, port workers, laundry workers, seafood processing workers, ceramic kiln operators.
Key challenges faced by informal workforce
1) Financial fragility and volatility
a) Workers face constant financial instability due to irregular incomes, lack of buffers and reliance on informal credit.
b) No verifiable income or complex loan procedures exclude them from accessing timely finance for emergencies or livelihood investments.
c) Absence of contracts and trusted identities leads to wage delays and disputes.
2) Market access and demand linkages
a) Most trade workers operate on the margins of the market, with limited access to steady demand, secure contracts or digital platforms.
b) Fragmented job access, lack of verified identities and no visibility into future demand leads to chronic income instability & underemployment.
c) Without portable IDs or jobmatching systems, migrants rely on mediators and face exploitation.
d) Low trust, poor visibility and non-inclusive platforms limit workers’ access to consistent demand and sustainable livelihoods.
3) Skilling and adoption
a) Skilling ecosystems are fragmented, non-adaptive and often disconnected from real-world job demands. Most workers rely on outdated methods and receive little or no formal training.
b) Digital skilling tools are rarely localised, adaptive or suited to low-end devices making adoption difficult and outcomes limited.
4) Social protection and occupational safety
a) The informal workforce remains outside the ambit of institutional protection, making them highly vulnerable to shocks.
b) Workers struggle to benefit from social schemes due to a lack of awareness, digital barriers and non-portable records.
c) Absence of safety standards, risk monitoring and protective technologies exposes workers to constant health hazards without recourse.
5) Productivity gaps
a) Productivity is stifled not by worker effort, but by systemic inefficiencies and lack of access to modern tools and technologies.
b) Most informal workers rely on minimal mechanisation, lack workflow optimisation and have limited access to user friendly tools which results in high effort, low output and no performance visibility.
What are frontier technologies?
• Frontier technologies are emerging at the intersection of radical scientific breakthrough and real-world implementation.
• They are changing the way we communicate, solve problems, provide goods and services, create and do business.
• It can be defined as technology that will “reshape industry and communications and provide urgently needed solutions to global challenges and have the potential to displace existing processes”.
Examples of frontier technologies
i) Digital technologies, such as the Internet of Things (loT), blockchain, the metaverse, artificial intelligence (Al), big data and cloud computing.
ii) Physical technologies, such as autonomous driving, 3D printing and hardware innovations.
iii) Biological technologies such as genetic engineering, human augmentation and the brain-computer-interface.
Transforming informal livelihoods through technology
• This shift will be enabled by foundational drivers such as affordable smartphones, pervasive connectivity, regional language AI, low-cost hardware and a mature, and secure digital infrastructure for trusted transactions.
• These enablers, coupled with frontier technologies and mature digital public infrastructure will help overcome challenges by strengthening trust, providing real-time guidance and enabling adaptive service delivery.
• These advancements have the potential to transform livelihoods at scale, but realising this future requires more than piecemeal solutions.
• Driving large-scale technology adoption across India’s informal trade workforce requires a centrally anchored mission.
Proposed mission
• AI will not automatically transform the informal sector. Technology alone cannot break systemic barriers.
• Without deliberate human intervention, focused investments, and an enabling ecosystem, the promise of AI risks remaining out of reach for those who need it most.
• To address this, NITI Aayog has called for Mission Digital ShramSetu.
• It is a proposed national mission to create the roadmap and ecosystem that will make AI accessible, affordable, and impactful for every worker.
• The mission will harness AI, blockchain, immersive learning, and other frontier technologies to dismantle structural constraints — ranging from financial insecurity and limited market access to lack of skilling and social protection — and empower informal workers with tools and platforms that amplify their skills, increase productivity, and ensure dignity in work.
• This proposed mission emphasises on building inclusion requires human intent, coordinated action, and collaboration across government, industry, academia, and civil society.
• Only then can AI serve as a true equaliser, lifting the millions at the margins into the mainstream of India’s growth story.
• The roadmap also underscores the high cost of delay. At the current trajectory, informal workers’ average annual income will stagnate at $6,000 by 2047 — far below the $14,500 target necessary to secure high-income status for India.
• Immediate, coordinated action is essential to avoid leaving millions behind and weakening India’s growth story.
• Decisions made today will determine whether emerging technologies deepen existing inequalities or unlock a more equitable and resilient future of work.