Govt To Encourage More BPOs In Small Towns

by CXOtoday News Desk    Jan 06, 2015


The IT outsourcing industry in India is geared up for further growth, as the government is in the final stages of formulating guidelines for setting up a business process outsourcing (BPO) policy for small towns and cities to create jobs for the youth and improve the economic conditions of those areas.

The guidelines are expected to be implemented in the new fiscal starting April 1, 2015. IT and Telecom minister Ravi Shankar Prasad told PTI, “We are in the process of finalizing the guidelines for establishing BPOs in small tier II and III cities across the country especially in states like Uttar Pradesh, Bihar and Odisha.”

He believes that the country has a huge pool of English-speaking youth in the small towns and cities and it is important for the government to make conditions favourable for companies to establish centres in those areas. By creating more employment they will not have migrate to cities like Delhi, Bengaluru and Mumbai in search of jobs, he added. 

Experts believe since the government has so many new schemes such as public distribution system, banking and healthcare services, such customer centres can help manage those services. Job creation in the BPO sector is also a vital step in the Digital India program, as it will help connect the tier II and III cities in the country with the global map and will help them grow and realize their potential.  The government is also discussing some of the issue related to the infrastructure with the state governments. These include supply of 24-hour electricity, water and road conditions that need to be taken care of.

The IT outsourcing sector in India is pegged at $21 billion at present. It is growing at 12% annually and is expected to touch $50 billion by 2020. According to a study by IT-ITeS industry body Nasscom, Cities like Ahmedabad, Bhubaneswar, Indore, Jaipur, Kochi, Lucknow, Madurai, Mangalore, Tiruchirappalli, Vadodara and Vishakhapatnam have great potential to run BPO operations. 

Cities like Aurangabad, Bhopal, Goa, Gwalior, Hubli, Kanpur, Mysore, Nashik, Puducherry, Salem, Surat and Vijayawada also have the potential to develop BPO centres. Other cities like Allahabad, Dehradun, Durgapur, Gangtok, Guwahati, Ludhiana, Patna, Raipur, Ranchi, Shimla, Siliguri, Srinagar and Varanasi can also have BPO centres, it said.  The study highlighted that lower operational costs, untapped talent pool and low attrition are some of the advantages that can help these small cities run successful BPO operations.

Experts believe the government is trying to bring the small towns and cities in the country on the Information Technology map and setting up of BPO centres in these cities is one of the steps.