As the world races towards an AI-driven industrial future, India’s Public Sector Undertakings—long regarded as the backbone of the nation’s economy—stand at a crucial inflection point. With responsibilities spanning energy security, defence, infrastructure, and citizen services, PSUs are no longer just engines of scale and stability; they are emerging as custodians of ethical, inclusive, and accountable technological transformation.
In this wide-ranging conversation with Indian Masterminds, Mr. Atul Sobti, Director General of SCOPE and Member of the Governing Body of the International Labour Organisation (ILO), offers a rare insider’s perspective on how India’s public sector is preparing for the AI revolution. From governance and procurement reforms to workforce reskilling, cybersecurity, and global collaboration, he explains why PSUs are uniquely positioned to lead—not follow—India’s rise as an AI-powered economic force.
Speaking with clarity and conviction, Mr. Sobti underscores that artificial intelligence is not merely about automation or efficiency gains, but about reimagining institutions, empowering people, and reinforcing public trust. As India enters what he calls its “AI decade,” his insights lay out a clear roadmap for how PSUs can remain profitable, competitive, and future-ready—without losing sight of their social mandate.
As PSUs remain the backbone of the Indian economy, how does SCOPE envision their evolution in a world moving toward AI-led industrial transformation?
Public Sector Undertaking or PSUs have always been at the forefront of nation building. They have not only led social development but also contributed meaningfully to the economic growth of the country. Presently, 291 operating public sector enterprises are contributing more than 11% to the Indian GDP while also driving strategic sectors of Oil, Gas, Coal, Mining , Steel, Power, and Defense. Employing more than 15 lakh people directly and ensuring an equitable social development by increasing the contribution of CSR every year, public sector are highly profitable enterprises with 78% companies profit making. Given their strong performance and good governance, public sector is also trusted by investors which can be seen from the fact that while only 66 public sector enterprises are listed, they command more than 8% of the BSE market capitalisation. Infact, they are also making strong pursuits in innovation as their investment in R&D has been seeing an increasing trend. In the year 2024-25 alone, they have invested close to Rs 10,000 lakh crores in R&D, more than 25% increase in one year alone. Given their strong focus on innovation, PSUs have also been actively driving AI-led industrial growth while integrating their conventional areas of production and infrastructure with AI tools. They have been using AI to improve efficiency, transparency, citizen services, safety, and strategic decision-making also using technology to explore scalable solutions.
As public sectors evolve with needs of modern industrialisation, SCOPE believes that PSUs would come out as strong, future-ready institutions in an AI-led world by embracing technology as a strategic enabler rather than just a tool. We believe that they would integrate conventional operation with AI tools so as engage in data driven innovation. We envision PSUs investing in digital infrastructure, workforce reskilling, ethical AI adoption, and collaborative ecosystems to build responsible and inclusive AI businesses aligned with national priorities.
In this journey, SCOPE, as the apex body of PSUs, is working as a catalyst, capacity builder and policy advocate to ensure that AI is not just a technological shift but a transformational opportunity for the public sector.
With global competitors adopting AI rapidly, what steps should PSUs take to remain competitive and profitable in the next decade?
Well, I would like to expand the question a bit because now, global competition is no longer only about cost or scale it is about speed, intelligence, and trust. And in this, it is important for PSUs to not only be innovative but be the pioneers in adapting and embracing AI as a business strategy. For this purpose, they need to invest intelligently in Skilling, Alignment and Partnerships (SAP).
Let me take this one by one. The first is SKILLING i.e. investing in people and providing them opportunities to upskill themselves in the area of AI. For this, while programs may be organised by each enterprise for their workforce, but a program catering to larger audience of enterprises enables greater learning and most importantly cross and peer learning. Second is ALIGNMENT i.e. alignment to organisational strategy and objective. This aspect is important especially to integrate AI into areas like predictive maintenance, automation, customer services, logistics, and energy optimisation to reduce costs and improve efficiency. Hence, it is important to align the use of AI with the organisational objectives so that both move in the same direction. Third is PARTNERSHIP. To achieve excellence in AI, Collaboration is the key. PSUs need to work closely with new-age organisations like startups, technology firms, and academia who bring in cutting-edge solutions.
Where do you see the highest-impact AI applications for improving governance, transparency, and decision-making across PSUs?
The highest-impact AI applications for improving governance, transparency, and decision-making in PSUs are not where AI looks impressive, but where it quietly improves integrity, speed, and accountability.
While, AI can be used across, but to ensure that governance and decision making are enhanced, I feel there are two areas where AI can benefit most – procurement and evidence-based decision making.
Public Sector are unique enterprises where there are large scale procurements, numerically over Rs 4 lakh crores per annum. This makes the procurement transactions complex. Hence, if AI is integrated in the procurement systems, then the same can be made optimally and transparently. Where it can also be used to monitor optimal utilisation of inventory thereby avoiding over or under stocking/ procurement, it can also be used to ensure fair bidding process thereby making the procurement process fair and just. Further, it can also be used for mapping locational stock position by sharing the stock availability at various works and project sites thereby ensuring better resource mobilisation and its effective utilisation. Besides stock utilisation, AI can also facilitate in broadening the procurement sources. It can facilitate identification of availability of raw material in a time bound and most cost effective manner. This not only saves time but also makes a well researched procurement by identifying additional national and international sources which may not be otherwise known to us.
Another area where AI can be integrated in PSUs is evidence-based decision-making. AI-driven data analytics can significantly improve policy planning and operational oversight by analysing performance, financial, and service trends. Analytics can also determine risk points in the organisations operation and financial aspects thereby supporting more informed and timely decision-making. Also, AI can facilitate systematic knowledge and experience sharing among contemporary organisations, enabling them to make better-informed and well-considered decisions ensuring more effective formulation and implementation of solutions.
If AI is used effectively, it can drive decision making in a transparent manner which will redefine trust in public enterprises.
Several PSUs handle national critical infrastructure. How can they balance AI adoption with security, privacy, and ethical safeguards?
Yes, that’s correct. Public Sector is engaged in nationally important critical infrastructure including country’s energy security and also defence requirements. AI is being extensively used in key spheres of process and product innovation, processing large volumes of sensitive data, processing information for critical decision-making and even providing citizen centric services thereby having access to citizen data. This makes it imperative that there are robust safeguards to prevent misuse, manipulation, and unauthorized access of data and information. For this, as a first line of protection against any misuse and unauthorised access, it is essential to install effective firewalls/ access protection systems which not only prevent unauthorised access, cyber intrusions, manipulation of datasets, and tampering but also protect both the infrastructure and the credibility of AI outputs by ensuring authorised users’ access only. Further, encryption tools need to be used to so that the data is protected even if there is breach of access.
While, these are aspects of building preventive measures and systems, what is important is to monitor the security systems on a regular basis so that the security is not only ensured but also evolves as data complexity increase. Further, more important is to build a culture where responsibility, accountability, and transparency guide every decision and action. While, systems can only do so much, what is of utmost importance is to build a human culture of trust and confidence to be resilient against misuse or overrides.
Hence, it is important to remember that true measure of digital progress is not how advanced our AI becomes, but how secure our systems remain
With AI impacting job roles, what strategies should PSUs adopt to reskill and transition their large workforces responsibly?
Well, I would put this a little differently. Yes, AI will change job roles and not impact jobs in terms of replacement. Hence, the need is to ensure a people-centric proactive approach that balances operational efficiency and workforce inclusivity for sustainability and adaptation of AI. For this purpose, it is essential thatleadership exhibits clear commitment, establishes clear communication, is farsighted and adopts empathetic approach. For this purpose, while specific strategies would be different for each organisation, overall principles should focus on three areas for adopting reskilling and workforce transition – first is mindset change, second is mapping skill requirements and lastly effective communication for implementing transitioning frameworks.
When I say MINDSET CHANGE, what is essential is acceptability amongst the organisation at large that yes, AI is the need of the hour and essential to move forward. But at the same time, it has to be viewed as an enabler not a challenge. Hence, there is a need to move from fear to preparedness by acknowledging that AI is not merely a technology shift, but an organisational transformation. This aspect needs to be imbibed from top to bottom at all levels which will prepare the organisations for AI transition.
With regard to the second aspect of MAPPING SKILL REQUIREMENTS, what we are talking about is right skilling at right level. We all know that to adapt AI, it is important to skill and reskill employees but this cannot be a ‘one size fit all approach’, it has to be role, job and future need specific. Hence, this would require mapping current roles against future needs to identify which jobs will be augmented, which may be phased out, and where new opportunities will emerge. Based on this analysis, a structured reskilling and upskilling pathway can be laid down which is more role and job specific. This needs to be combined with a foundational digital literacy for all employees with specialised AI, analytics, cybersecurity, and domain-tech integration training for relevant segments.
All this would be possible only when there is clear and effective communication of the integrating AI in the job roles across the organisation bringing us to the last focus area of EFFECTIVE COMMUNCIATION FOR IMPLEMENTATION. This is the onus of the management as through communication, employee engagement can be enhanced and continuous learning can be prioritised. Simultaneously, empathy-led leadership, and structured change management develops a positive mindset and greater acceptability of newer technologies and processes.
This way public sector can not only protect their workforce but also empower them to thrive in an AI-driven future. This will enable the employees to become future-proof.
How does SCOPE plan to create a training ecosystem—possibly in partnership with global institutions—to build AI-ready leaders and managers within PSUs?
SCOPE, as the apex body of public sector enterprises in the country, has been playing a constructive role so as to support the PSUs in their endeavours through a series of novel initiatives which include effective policy advocacy, learning & development, research & studies. In continuation of its objective, SCOPE is also undertaking in-depth work in the area of AI so that the public sector is able to transition most effectively and smoothly. Hence, SCOPE is not only focusing on building capacities in the public sector but also engaging with global and national policy makers and experts so as to ensure that the capacity building in this area is relevant and job specific.
Hence, at the National level, SCOPE has worked closely with Department of Public Enterprises, Ministry of Finance in the area of Industry 4.0. In this regard, high level discussions have been taking place with Senior Management on how the industries need to embrace emerging technologies for enhanced productivity and decision making. Also, SCOPE is working with accredited academic institutes to conduct studies on Digitalisation in Indian PSUs and is exploring further studies on integrating AI as per sectoral and job role requirement in the public sector.
Also, SCOPE has close association with International Organisation of Employers (IOE), Geneva which is working on strengthening the global employers in the area of AI. In this regard, SCOPE has been engaging in their workshops and training programs so as to build its capacities in the area of AI.
Going forward, SCOPE is exploring opportunities with leading organisations to work in the area of AI and work together in ate area of not only creating awareness but also developing specific capacities and capabilities in Public Sector in AI.
What kind of national policy support or regulatory framework is needed to help PSUs integrate AI seamlessly while ensuring accountability?
Well, first we need to understand that Public Sector are not any different from any private enterprise. They have similar concerns of commercial prudence like any other organisation and are not treated preferentially when it comes to governance or legal compliances. The only difference is in the ownerships structure which makes our accountability even more. Hence, national policy support for AI is not needed for public sector alone but the entire corporate sector and the nation as whole to ensure a structured investment and scope of AI while clearly defining responsibility, accountability, and safeguards.
Accordingly, first and foremost what is required is a India needs a balanced national policy framework that encourages innovation while ensuring accountability, transparency, and trust. From SCOPE’s perspective, the first requirement is a clear national AI governance architecture—one that defines standards for data quality, privacy, ethical use of AI tools etc. This defined structure will give an insight as to what can be covered by AI and how the same is to be protected thereby ensuring no data breach or misuse of data. However, while standards should be laid, enough flexibility should be allowed to the organisations to innovate.
Secondly, since this area is very new and dynamic requiring transitioning of workforce, it is important to lay guidelines for capacity building. This would work two ways -first the organisations would have a clear guidance who to reskill or upskill and how often should workforce be skilled to transition to the new landscape of AI. Also, laying down guidelines for capacity building would also make the people at large aware that AI is a national mission and national frameworks are present to recognise the reskilling efforts of the people.
A beginning has already been made with the launching of AI Mission by the Government of India which aims to build a self-reliant, inclusive, and ethical AI ecosystem but going forward structures need to be put in place.
Looking ahead, what role do you see PSUs playing in shaping India’s rise as an AI-driven global economic power, and what is SCOPE’s roadmap to guide them?
Public Sector Undertakings in India form the pillars of the Indian economy. They have been the key drivers of the socio-economic development of the country and hence, to ensure that India leads the globe with its AI prowess, it is imperative that PSUs play a defining role. This becomes all the more important as it is these PSUs which will ensure complete integration of AI across geographical locations, critical sectors and national development priorities thereby acting as both enablers and accelerators.
PSUs will be enablers of AI as given their presence across critical and infrastructure sectors, PSUs will play a pivotal role in ensuring that AI is integrated across manufacturing, energy, transportation, financial services, infrastructure, and citizen service delivery thereby enhancing efficiencies, reduce costs, productivity, and improve transparency. Given their commitment to ethics and accountability, PSUs can set benchmarks for responsible and ethical AI adoption, ensuring inclusivity and trust. As accelerators, they can engage in supporting innovation ecosystem by encouraging indigenous AI solutions and fostering skill development thereby augmenting their capabilities along with competitiveness of other.
In this journey, SCOPE will focus on facilitating integration by providing avenues for collaboration and knowledge exchange while also facilitating a conducive policy environment. For this, SCOPE envisages to provide platform for dialogue and industry exchange with global institutions, industry leaders, and research bodies to bring best practices, emerging innovations, and real-world applications to PSUs. For this, SCOPE plans to interact with the Government to shape enabling frameworks to support AI while also engaging with knowledge partners to develop the skill and capacities in the public sector to learn, unlearns and relearn AI with its evolution.
Our motto in enabling AI is simple- support, skill and scale; support through conducive policy environment, skill through capacity building and scale through collaborations. Through this we seek to help PSUs further their way as the fulcrum of India’s AI decade and more!
