Chief Economic Adviser V Anantha Nageswaran on Thursday said the government has done its part by announcing several measures in Budget to support Global Capability Centres (GCCs), and called on industry to invest in skilling, capability development and innovation to address the challenges posed by artificial intelligence.
Observing that AI has exposed old model, Nageswaran said it is likely to displace routine, repetitive and rule-based tasks, and it would be unrealistic to deny the risks posed to business models built solely around low-cost execution.
Highlighting the role of government-industry collaboration, the CEA said the Union Budget has addressed a long-pending industry demand by simplifying and expanding the transfer pricing safe harbour regime for GCCs.
The revised framework provides a uniform margin, significantly higher thresholds and faster, more predictable approvals over a multi-year period, improving tax certainty for such centres, he said addressing CII GCC Summit here.
The government has also launched a national framework to encourage the expansion of GCCs beyond the six major metropolitan cities into tier-II and tier-III locations, he said.
