In a potentially first-of-its-kind move in India, Telangana is exploring policies to tax Artificial Intelligence (AI) companies to compensate individuals who may lose jobs due to automation, Chief Minister A Revanth Reddy informed.
Addressing an AI Symposium hosted by the Harvard Kennedy School in the United States via video link, Reddy described AI as a “double-edged sword,” cautioning that its risks could outweigh benefits if not addressed early.
“We will try to bring policies similar to those on pollution, where polluting industries have to pay for carbon credits—we will introduce laws so AI firms can be taxed for ‘people credits’,” he said, adding, “It is only fair that companies with massive valuations compensate society for jobs that are lost.”
Drawing parallels with past technological transitions, the Chief Minister noted that machines have historically reduced manual labour rather than eliminated jobs entirely. However, he warned that while AI may boost productivity, it could significantly impact entry-level employment across sectors.
“AI will change the scope of work for doctors, lawyers, architects, filmmakers, writers, and policymakers—instead of replacing them,” he said, adding that the nature of jobs will evolve rather than disappear entirely.
Reddy also highlighted the state’s ambitious infrastructure plans, including the proposed ‘Bharat Future City’ on the outskirts of Hyderabad. He said a dedicated district within the project will focus exclusively on AI, envisioned as a hub for Global Capability Centres (GCCs) and related technologies.
Following his address, the Chief Minister reiterated his vision in a post on the social media platform X, stating that AI will reshape global economies and power structures, and that regions that prepare early will lead the future.
“Telangana is acting now—building Future City and AI City, driving reskilling, and creating the jobs of tomorrow,” he said.
“We are building a global AI hub powered by talent, while expanding sectors like tourism, electric vehicles, and infrastructure.”
He added that the proposed “People Credits” framework aims to ensure that AI development remains responsible and inclusive, inviting global investors to participate in Telangana’s growing technology ecosystem. If implemented, the proposal could position Telangana at the forefront of policy innovation in addressing the socio-economic impact of artificial intelligence in India.
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