World Development Report 2026 – “The Promise of AI” : GS TIMES IAS-PCS

Why in News?

The World Bank’s World Development Report 2026 – “The Promise of AI” provides a comprehensive assessment of the opportunities and challenges posed by Artificial Intelligence (AI) in developing economies. It examines how firms and governments are using AI, the barriers to adoption, potential economic gains and ways to manage associated risks.

AI and Employment

The report finds that the risk of job displacement due to AI is significantly higher in high-income countries than in low- and middle-income countries.

Low- and middle-income countries: Around 4.5% of existing jobs are at risk due to AI.
High-income countries: Around 14.2% of jobs are at risk.

However, AI’s potential to increase productivity is relatively broad-based. About 16.2% of jobs in developing economies could experience meaningful productivity gains from AI, compared with 18.7% in high-income economies.

India as an Example

The report highlights several Indian initiatives to demonstrate that the greatest potential of AI in developing economies may lie in augmenting workers rather than replacing them.

Sarvam AI is cited for developing new AI models rather than simply modifying existing models, demonstrating the potential for locally developed AI capabilities.

AI for Agriculture

The report highlights the use of AI-generated weather forecasts among farmers in Telangana. Such information is helping farmers make better decisions regarding production and investment, particularly where traditional government and agricultural extension services have had limited reach.

INDIAai Mission

The report highlights India’s INDIAai Mission as an example of government support for AI adoption.

It notes that governments can support small businesses, start-ups and researchers by making computing resources available at lower costs, thereby reducing one of the major barriers to AI development.

BHASHINI and Digital Public Infrastructure

India’s BHASHINI initiative is highlighted for improving access to public information and records by addressing language barriers.

The report also refers to India’s digital initiatives such as:

DigiLocker
e-Courts Mission Mode Project
National Judicial Data Grid

These initiatives demonstrate how digital infrastructure can provide a foundation for broader AI adoption.

AI in Government Capacity Building

The report highlights iGOT Karmayogi, the government’s digital learning initiative, which has enabled more than 1.3 million government officials to complete AI-related courses.

This demonstrates the importance of building AI skills within public institutions alongside technological infrastructure.

Developing Countries Do Not Need Trillion-Dollar AI Models

The report argues that developing countries do not necessarily need to build extremely expensive, general-purpose AI models to benefit from the technology.

However, simply importing AI tools is also insufficient. Countries need to:

Adapt AI to local languages and contexts.
Align AI systems with local institutions, data and development needs.
Ensure interoperability among different AI platforms and providers.
Build the necessary skills, computing infrastructure and digital connectivity.

The Potential of “Small AI”

The report emphasises the potential of low-cost “small AI” tools that can bring specialised expertise to millions of people through: