Parliament Bill Proposes Rs 5 Crore Penalty for Misuse of AI Systems

A private member’s Bill introduced in Parliament proposes strict penalties of up to ₹5 crore for the misuse of artificial intelligence (AI) systems in India.

The Artificial Intelligence (Ethics and Accountability) Bill, 2025, introduced in the Lok Sabha by BJP MP Bharti Pardhi, aims to create a legal framework to regulate how AI technologies are developed and used across the country. The Bill focuses on ethical use, transparency, and accountability in AI-driven systems.

Under the proposed law, penalties can be imposed for activities such as unauthorised AI-based surveillance, discriminatory decisions made by algorithms, and failure to maintain transparency in AI processes. The Bill highlights concerns around bias, misuse, and unchecked deployment of AI technologies.

The Bill also proposes the setting up of an Ethics Committee for Artificial Intelligence by the Central government. This Committee would be headed by an expert in ethics and technology and include members from academia, industry, civil society, government, and fields such as law, data science, and human rights.

The Ethics Committee would be responsible for drafting ethical guidelines for AI, monitoring compliance, examining cases of misuse or bias, and spreading awareness among AI developers, deployers, and users. It would also focus on capacity-building to promote responsible use of AI technologies.

According to the Statement of Objects and Reasons, the Bill seeks to balance the benefits of AI innovation with safeguards against misuse. It aims to ensure that AI systems are used in a way that supports democratic values and public interest.

The Bill places clear restrictions on the use of AI for surveillance. Such use would be allowed only for lawful purposes and would require prior approval from the Ethics Committee.

In sensitive areas like law enforcement, financial services, and employment, AI systems would face stricter ethical scrutiny. The Bill states that these systems must not discriminate on grounds such as religion, race, or gender, and must undergo ethical review before being deployed.

Developers of AI systems would have specific responsibilities under the proposed law. They would be required to disclose the purpose and limitations of AI tools, explain the data and methods used to train them, and provide reasons for AI-based decisions that affect individuals.

To address algorithmic bias, the Bill mandates regular audits, inclusive and diverse training data, and temporary withdrawal of AI systems that show serious bias until corrective steps are taken. Developers would also need to maintain records proving compliance with ethical standards.

Individuals or groups affected by misuse of AI would have the right to file complaints before the Ethics Committee. The Committee would have the power to investigate such complaints and recommend penalties or corrective action.

Depending on the seriousness of the violation, penalties could include fines of up to ₹5 crore, suspension or cancellation of licences to deploy AI systems, and in cases of repeated violations, possible criminal liability as prescribed under the law.