Nearly 46,000 new jobs have been created in the BPO (business process outsourcing) sector in small towns and cities over the last one-and-a-half years under the India BPO promotion Scheme (IBPS) launched by the electronics and IT ministry, said Rajiv Kumar, joint secretary in the ministry on Thursday.
He was speaking at an event organised by the software technology parks of India (STPI), the nodal agency for executing the IBPS in Maharashtra.
Aimed at creating jobs in small towns, this scheme has helped set up 240 companies across the country of which 145 are operational (the other companies are in different stages of getting their operations started) .These companies have employed 19,200 people, Kumar said. In Maharashtra, 18 BPO units have been set up under the scheme across nine cities including Sangli, Dhule, Nashik, Aurangabad and Kolhapur. These 18 BPOs employ 3,500 people.
“The information technology (IT) industry in India has matured and slowly moved up in the chain with newer technologies like AI (artificial intelligence) and machine learning being used. However, the BPO business still has a lot of potential. Despite Indian BPOs getting stiff competition from Philippines and Ireland, the government of India has decided to give a fillip to the Indian BPOs by providing financial assistance,” he said.
Under the IBPS, an entrepreneur setting up a BPO can get up to ₹1 lakh financial assistance per seat. The criteria being a minimum of 100 seats and a turnover of ₹2 crore in the past three years. Sanjay Kumar Gupta, director STPI , Maharashtra, said, “The scheme will give 50% of CAPEX (capital expenditure) or OPEX (operating expenses) of the BPO up to ₹1 lakh. This would be applicable only to BPOs in tier 2 or 3 cities.
{{/usCountry}}Under the IBPS, an entrepreneur setting up a BPO can get up to ₹1 lakh financial assistance per seat. The criteria being a minimum of 100 seats and a turnover of ₹2 crore in the past three years. Sanjay Kumar Gupta, director STPI , Maharashtra, said, “The scheme will give 50% of CAPEX (capital expenditure) or OPEX (operating expenses) of the BPO up to ₹1 lakh. This would be applicable only to BPOs in tier 2 or 3 cities.
{{/usCountry}}“Small towns need to be supported this way so that this aids development in the area and prevents urban congestion. If Maharashtra has 3,500 BPO jobs under this scheme this will necessarily mean that at least 3 people in ancillary industries will benefit. A BPO will need housekeeping services, security, travel and so on. Moreover, many will operate in three shifts leading to further job creation,” he said.
Places like Bhiwandi, Latur, Wardha, Nandurbar, Osmanabad and even Sopore in Jammu & Kashmir have BPO units set up. “In hilly regions we have a target of 50 seat capacity. We aim to further incentivise aspirational districts (since these areas are affected by naxalism and they want to do something special for these places) such as Gadchiroli and Chandrapur,” he said.
Kumar stressed that the ‘big daddies’ of the IT industry should be a part of this movement by outsourcing their BPO jobs to smaller companies that are under the IBPS. “We need a hub and spoke model so that these entrepreneurs get a further push in terms of getting business. We can help them in setting up the company, but getting orders is entirely their job. They can register on GEM (a government of India initiative to create an e-marketplace for goods and services) but we cannot help them with the task of getting business,” he said.
Atul Kalburge, a senior executive at Infosys, said that smaller towns have their own peculiarities. “We tried to outsource our work to smaller towns; in particular we set up BPOs in tier 2 towns in Tamil Nadu, Karnataka and Andhra Pradesh. We called them rural BPOs. Our experience showed that the issues of power supply, connectivity, security, talent and quality are serious challenges. Which is why we shut down our operations in these small towns.”