CM Revanth Reddy Announces AI “People Credits” Tax in Telangana
Telangana proposes AI tax to offset employment impact, CM says.
In a potentially first-of-its-kind move in India, the state of Telangana is considering policies to tax artificial intelligence (AI) companies to compensate workers who may lose jobs due to automation, Chief Minister A Revanth Reddy announced. Speaking via video link at an AI Symposium hosted by the Harvard Kennedy School in the United States, Reddy described AI as a “double-edged sword,” emphasizing that its risks could outweigh benefits if not addressed proactively.
Reddy explained that the proposed taxation framework, referred to as “People Credits,” would operate similarly to carbon credits imposed on polluting industries. “We will introduce laws so AI firms can be taxed for ‘people credits,’” he said. “It is only fair that companies with massive valuations compensate society for jobs that are lost.” The Chief Minister suggested that this initiative could help balance technological advancement with social responsibility.
Drawing historical parallels, Reddy noted that while machines have traditionally reduced manual labor rather than eliminating jobs entirely, AI’s impact may be more extensive, particularly on 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, underscoring that job roles will evolve rather than disappear entirely.
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The Chief Minister also highlighted Telangana’s ambitious infrastructure plans, including the proposed “Bharat Future City” on Hyderabad’s outskirts. A dedicated district within this project is expected to focus exclusively on AI, envisioned as a hub for Global Capability Centres (GCCs) and related technologies. This aligns with the state’s broader strategy to position itself as a global technology leader.
Following his address, Reddy reiterated the initiative on the social media platform X, stressing that AI will reshape global economies and power structures. “Telangana is acting now—building Future City and AI City, driving reskilling, and creating the jobs of tomorrow,” he wrote. He added that the state’s approach combines technology development with workforce preparedness, expanding sectors such as tourism, electric vehicles, and infrastructure.
If implemented, the “People Credits” framework could make Telangana a pioneer in AI policy innovation in India, ensuring that the growth of automation remains both responsible and inclusive. The initiative also signals an invitation to global investors to participate in the state’s growing technology ecosystem, highlighting a vision that blends economic growth with social accountability.
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