2025 • Bill No. 59 of 2025
Artificial Intelligence (Ethics and Accountability) Act, 2025
Establishing a comprehensive Ethics and Accountability Framework for AI technologies in decision-making, surveillance, and algorithmic systems to prevent misuse and ensure fairness, transparency, and accountability.
Overview
The Artificial Intelligence (Ethics and Accountability) Act, 2025, represents India’s pioneering effort to establish a comprehensive regulatory framework for ethical AI deployment. Introduced by Smt. Bharti Pardhi, M.P., this bill addresses the growing concerns around AI misuse, algorithmic bias, and the need for transparent and accountable AI systems.
Key Objective
To establish an Ethics and Accountability Framework for AI technologies used in decision-making, surveillance, and algorithmic systems, preventing misuse while ensuring fairness, transparency, and accountability across all AI implementations.
Ethics Committee for AI Technologies
The Act establishes a dedicated Ethics Committee for Artificial Intelligence under Section 3, which serves as the central regulatory body for AI governance in India.
Committee Composition
- Chairperson: Expert with specialized knowledge in ethics and technology
- Representatives: From academia, industry, civil society, and government
- Experts: In law, data science, and human rights
Core Functions
| Function | Description |
| Guideline Development | Develop and recommend ethical guidelines for AI technologies |
| Compliance Monitoring | Monitor compliance with ethical standards in AI systems |
| Violation Review | Review cases of misuse, bias, or violations of the Act |
| Capacity Building | Promote awareness and capacity-building among stakeholders |
AI Surveillance and Decision-Making Restrictions
Section 5 of the Act places strict controls on AI use in surveillance and critical decision-making processes to protect individual rights and prevent discriminatory practices.
⚠️ Surveillance Limitations
AI surveillance systems can only be deployed for lawful purposes with prior approval from the Ethics Committee. All surveillance applications must demonstrate legitimate need and proportionality.
Critical Decision-Making Areas
AI systems used in the following areas require stringent ethical review:
- Law Enforcement: Criminal justice, policing, and security operations
- Financial Services: Credit scoring, loan approvals, and financial risk assessment
- Employment: Hiring decisions, performance evaluations, and career progression
Non-Discrimination Requirements
AI systems in critical decision-making must not discriminate based o
- Race
- Religion
- Gender
- Any combination of these protected characteristics
Developer Responsibilities
Section 6 outlines comprehensive obligations for AI developers to ensure transparency and prevent algorithmic bias in their systems.
Transparency Requirements
Developers must provide clear disclosure of:
- Purpose and Limitations: Intended use cases and system constraints
- Data Sources: Training data origins and methodologies
- Decision Rationale: Explanations for AI-driven decisions affecting individuals
Algorithmic Bias Prevention
🔍 Compliance Checklist for Developers
- Conduct regular audits to identify and mitigate biases
- Ensure diversity and inclusivity in training datasets
- Withdraw biased AI systems until corrective measures are implemented
- Maintain comprehensive records of compliance activities
- Document transparency measures and decision-making processes
✅ Best Practice
Implement continuous monitoring systems for algorithmic bias detection and maintain detailed audit trails of all bias mitigation efforts to demonstrate ongoing compliance.
Penalties and Enforcement
Section 8 establishes a robust penalty framework to ensure compliance with the Act’s provisions.
Financial Penalties
| Violation Type | Maximum Fine | Additional Consequences |
| First-time violations | ₹5 crores | Mandatory compliance audit |
| Repeat violations | ₹5 crores + Criminal liability | License suspension/revocation |
| Severe bias/discrimination | ₹5 crores | Immediate system withdrawal |
Administrative Actions
- Suspension of licenses for deploying AI systems
- Revocation of operational permissions
- Mandatory remedial measures and system improvements
- Public disclosure of violations (where appropriate)
Grievance Redressal Mechanism
Section 7 establishes a comprehensive framework for individuals and groups to seek redress for AI-related harms.
Who Can File Complaints
- Affected individuals
- Groups or communities
- Civil society organizations (on behalf of affected parties)
- Legal representatives
Complaint Process
- Filing: Submit complaints to the Ethics Committee in prescribed manner
- Investigation: Committee conducts thorough investigation
- Recommendation: Committee recommends appropriate actions
- Implementation: Enforcement of penalties or remedial measures
Types of Remedial Actions
- Financial compensation for affected individuals
- Mandatory system modifications or improvements
- Public apologies and corrective disclosures
- Training and capacity building requirements
Compliance Strategy for Organizations
Organizations deploying AI systems must develop comprehensive compliance strategies to meet the Act’s requirements.
Implementation Timeline
| Phase | Timeline | Key Activities |
| Pre-Implementation | 6 months before Act enforcement | 6 months before Act enforcement |
| Initial Compliance | Act enforcement date | Basic compliance measures, documentation |
| Full Compliance | 12 months post-enforcement | Complete audit framework, ongoing monitoring |
Recommended Compliance Framework
- Governance Structure: Establish AI ethics board and clear accountability lines
- Policy Development: Create comprehensive AI ethics and usage policies
- Risk Assessment: Implement regular AI bias and impact assessments
- Training Programs: Educate staff on ethical AI principles and compliance requirements
- Documentation: Maintain detailed records of AI development and deployment processes
- Monitoring Systems: Deploy continuous monitoring for bias and performance metrics
Financial Impact and Funding
The Act includes significant budgetary provisions for implementation and enforcement.
Government Investment
- Recurring Expenditure: ₹500 crores per annum for Committee operations
- Non-recurring Expenditure: ₹100 crores for initial setup and infrastructure
- Total Initial Investment: ₹600 crores in the first year
📊 Budget Breakdown
- Committee operations and staff: 60%
- Technology infrastructure: 25%
- Compliance monitoring systems: 10%
- Public awareness and training: 5%
Table of Contents
Quick Facts
Bill Number:
59 of 2025
Introduced by:
Smt. Bharti Pardhi
House:
Lok Sabha
Status:
Introduced
Max Penalty:
₹5 Crores
Annual Budget:
₹500 Crores
Scope:
All of India
Key Focus:
Ethics & Accountability