“Creating better humans will always be more important than creating smarter machines”.

-Garry Kasparov


The Ministry of Road Transport and Highways made FASTag mandatory for certain categories of vehicles from February 2021 in order to turn the highway toll collection system into a fully automated system. FASTag is a system wherein a tag will be pasted on the vehicle and it will be detected at the toll plaza leading to an automatic deduction of the toll amount from the vehicle owner’s linked bank account or other prepaid wallets.[i] Prior to this, toll plaza employed people who did this job including collecting cash, giving the ticket and receipt, etc. While the decision has several benefits in terms of convenience and time-saving, the ramifications on the labour market are hard to ignore. In this article, the authors aim to discuss the impact of rapid automation on the labour market, the worth of the trade-off and the need for regulation in order to protect the interests of the workers being impacted by the rapid automation and the lessons to be learned from South Korea, New York and the EU.

How do FASTags work?

FASTags are electronic toll collection chips that use Radio Frequency Identification (RFID) Technology through which tolls are collected electronically without any cash handling and thereby reducing the reliance on toll workers for collection. For those vehicle owners who do not have FASTags or those who have faulty FASTags, they are treated the same and are charged twice the amount. While this may act like a deterrent for those who might opt for not having a FASTag, this brings out the problem of relying on technological ability over human intuition especially in the case of those who own a faulty FASTag and are penalised for not getting through a scan.

How does automation affect the workers?

Ever since the Industrial Revolution, with every technological advancement, there has been a looming fear of unemployment and job loss as the machines take over the work. For example, when cars and other vehicles appeared, horse-drawn carts disappeared. This has often been countered by groups who say that this fear is unfounded,given that in a society newer jobs appearin place of those made obsolete by machines. While it is true that machines will take over all available jobs, there is still the problem of which level of workers would be affected by the rapid automation of the workforce. New jobs may appear but it is not necessary that old workers would be accommodated into new jobs because of the skill level.[ii] In this context, the ‘level’ refers to the level of skills and the income level, whether high, low or middle, would be affected and in what manner by the oncoming automatons who take over the job space considering that no economic sector is going to remain untouched by the spread of technology. We would also have to consider whether the jobs would be completely replaced or would have to adapt with the inclusion of technology and automatons.

There are two possibilities which are for assessing how automation will affect the workforce. First, the possibility of job polarisation which will lead to the workforce being polarised towards the two ends, high level and low level, signalising reduction in the need of middle level workers who would be the most affected by the changes brought in by automation[iii]. This is because of the rise in demand and the increase in job opportunities for the high level and low-level workers while the demand for middle level workers would fall. This is further exacerbated by the second possibility which is the demand of non-routine work rising above routine work, which is the space most middle-level workers occupy. Non-routine workers are mostly part of the service sector and the nature of their job is such that it cannot be outsourced — this was emphasised during the COVID-19 pandemic when food service workers and health workers were considered important over jobs which could be easily done by machines. From this, we see that there is a clear risk to middle level routine jobs, which would be replaced easily when automation spreads to their area, while non-routine jobs which require adapting to problems and situation would be assisted by automation and would not face a big risk of being replaced.[iv] This group includes jobs which require human intuition and personal interaction which is something automation has not yet conquered, such as nurses, retail workers, etc. A good example for this would be the self-driving cars which do not work well with recognising and differentiating things which a human would such as traffic cones, or that the moon is not a traffic light.

Thus, it would not be wrong to say that jobs which require cognitive ability and adaptability which could only be provided by human workers would not necessarily be at the brink of extinction. A human salesperson would not be replaced by a robot sales person because of the human’s ability to adapt and adjust to the customer requirement which is not something an AI would be able to learn, but an AI might replace the workers whose job is to count money or arrange boxes because they do not require the interaction element which technology has not been able to replicate.

A lot of the workers which would be replaced by automation and technology in the coming years perform non-cognitive activities such as the example above. Consequently, these activities are also often low-income activities that would be easily be replaced. This would be the case for the FASTag workers as well because an automated system has been able to do the job they did, better than they ever did and has been able to collect more toll tax revenue than them. This would mean that there is no incentive for business owners to suffer losses when they could use automated workers who do a better job and are more efficient and do not chip away on revenue generated.

Need for a collaborative approach

There is no doubt about the fact that there are several benefits of artificial intelligence and automation including but not limited to increased productivity, lower costs and an increase in real income. However, it comes at a high cost as discussed in the previous section. Clearly, both the positions are extreme and call for a collaborative approach instead of choosing one. Further, there is a dire need to consider the rights of the workers losing their jobs due to automation.

One might suggest that the company, before firing workers due to automation must take charge of training the workers in a particular skill or another job which will assist them in getting work elsewhere. For instance, the toll booth workers are unskilled workers who might not be able to get work elsewhere with their set and level of skills. Therefore, it becomes the duty of the government or in other cases, the company to ensure that such displaced workers undergo training in a special skill or acquire knowledge in order to secure a job elsewhere. In case of India, Article 43 in Part IV of the Constitution of India directs the State to secure a living wage for all workers. While the Directive Principle of the State Policy under Part IV may not be enforceable, the State needs to keep these principles in mind while making the rules and regulations.

This is easier in the case of government workers however the solution might seem tricky when it comes to corporations aimed at profit making. Enacting provisions requiring the companies ensure training of replaced workers might prove to be futile. It will lead to issues like non-compliance with the provision, unlawful terminations which will further lead to increase in litigation and multiplicity of proceedings, garbed terminations of workers etc. In order to deal with these issues, some lessons can be learned from countries like South Korea and the European Union (EU) which are undergoing rapid transition of automation.

South Korea, the world’s most robotized county, became the first country to introduce a ‘robot tax’ in 2018. A robot tax is essentially a tax charged on the companies for the use of robots. This aims at reducing the pace of automation and at giving a real opportunity to the corporations to analyze their decision of employing robots in their companies.

The EU in 2017 introduced the idea of a robot tax to slow the pace of automation and to protect the interests of the workers; however, it was ultimately rejected because of its potential negative effects like reduced productivity and innovation. While it may seem like a sound argument prima facie, Eduardo Porter, an economics writer for the Times, provides with reasonable and logical arguments as to how it will actually prevent an unfair playing field and lead to economic efficiency.

In 2020, the New York mayor, Bill de Blasio, called for an automation policy with the introduction of a robot tax which would require companies to create a special fund to invest in new projects for the workers being replaced by machines. It would also include removal of tax incentives for automation and would require companies to provide other opportunities to the workers being replaced.

In India, amendments are required to be made in various labor and tax legislations in order to protect the interests of the workers as the country moves towards a capital intensive market. Certain provisions need to be added to the labor welfare legislations like the Workmen’s Compensation Act, 1923 and the Minimum Wages Act, 1948 providing for compulsory robot tax, necessary training of the workers and other providing other opportunities to the workers.


In a world where everything is becoming automatic, the labour needs protection from falling into poverty, destitution and vagrancy. In case the replacement is being done by the government, like in the case of FASTags in India, the government needs to take proper measures to protect the workers being affected by the same. Alternatively, in case it is the companies doing the same, the idea of a robot tax as considered by South Korea, the EU and New York must be considered vis-à-vis the country’s economic, social and financial environment instead of transposing the same model in a different country.  Some of the questions which are yet to be answered are what would fall in the definition of ‘robot’ in order to levy the robot tax, the level of tax to be levied and the substantive and procedural details about the training.

[i] Shreya M. Oza, ‘A Descriptive Study on FASTag: Electronic Toll, Standing Tall’, (2020) NOLEGEIN 26.

[ii] Nippani A, ‘Automation and Labour in India: Policy Implications of Job Polarisation Pre and Post Covid-19 Crisis’, (2020) LVI Manpower Journal 20.

[iii] Adams-Prassl J, ‘What If Your Boss Was an Algorithm?’ (2019) 41 Comparative Labor Law & Policy Journal, 123.

[iv] Kurer T, ‘Routine Workers in an Increasingly Automated World of Work: Evidence from Switzerland’ (2019) Sozialpolitik 1.

Chaaru Gupta and Anushka Tyagi, 4th Year students at NLU Jodhpur.

Picture Credits: Business Today.







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