The Union cabinet approved the India AI Mission in March 2024, with a budget outlay of Rs 10,371.92 crore over five years. A NITI Aayog report estimates that AI could add between $500 and 600 billion to India’s GDP by 2035. Job Crisi s or Sustainable Growth? What the Rapid AI Adoption in India Signifies - The Wire
Our government, like governments around the world, paints a rosy picture of our AI-powered future. Take, for example, NITI Aayog’s report, AI for Inclusive Societal Development (October 2025). It highlights how AI-driven tools can boost productivity and resilience for millions who form the backbone of India’s economy. The report also stresses that technology can bridge deep social and economic divides, ensuring that the benefits of AI reach every citizen.
The growth and expansion of AI is dependent on data centres which store vast amounts of data. The Union Budget 2026-27 provides for a 20-year tax holiday for foreign data companies using local data centres and exempts taxes until 2047 to attract firms like Google and Microsoft.
Data centres consume unfathomable amounts of energy, labour and natural resources. For example, a single AI query can consume up to ten times more power than a basic online search, and training a large language model can use over 1,000 megawatt-hours of electricity, roughly equal to the consumption of several hundred Indian households.
Experience in other parts of the world shows that when data centres are located in or near agricultural regions with overexploited aquifers, directly competing with farming for groundwater, water depletion adversely impacts agriculture.
Data centres in India have already been affecting the environment. Cooling systems in large data centres rely on water-based technology, yet over 80% of the facilities today are located in water-scarce states such as Maharashtra, Telangana, and Tamil Nadu.
In Bengaluru, data centres reportedly consume nearly eight million litres of water each day, even as the city faces extreme water shortages.
09/02/2026