Govt to offer 50% capital support per seat to set up rural BPOs

The government plans to offer subsidy of up to 50 per cent of the capital expenditure or Rs 1 lakh per seat, whichever is lower, for setting up business process outsourcing (BPO) units in small towns and villages.

The government has a target of creating 45,000 seats in the next two-three years, according to people close to the development. The scheme will have an outlay of Rs 500 crore and the subsidy will be available up to March 2017.

The contours of the rural BPO policy were finalised on Monday, in a meeting of the officials involved in the making of the policy, by Minister of Communications and Information Technology Ravi Shankar Prasad and the policy will be announced soon.

“Capital support in the form of viability gap funding will be an open bid system for companies that want to set up rural BPO centres,” a senior ministry official said.

The policy is meant to promote information technology in rural areas that have been left out so far. India’s major infotech hubs are in Bengaluru, Pune, Mumbai, Chennai, Hyderabad, Delhi-NCR and Kolkata. The policy will exempt these hubs.

Companies will also be offered incentives for employing more women. The objective is to create skills, besides generating employment opportunities, in small towns.

According to a Nasscom report, Ahmedabad, Kochi, Kolkata and Jaipur along with Bhubaneshwar, Cochin, Vishakapatnam, Thiruvananthapuram, Chandigarh and Indore are fast emerging as new destinations for business process management (BPM), a synonym to BPO. “These cities have made their way to the BPM sector map owing to their excellent infrastructure, including cheaper real estate, cost competitiveness, availability of talent and conducive business environment,” it said.

Also, the BPM sector is now $ 23.3 billion from $ 3.2 billion a decade ago. It employs 956,000 people, of which around 186,000 have been added over the past four years, according to Nasscom.

The ministry has been in the process of formulating guidelines for rural BPOs ever since the new government took over under Prime Minister Narendra Modi.

In an interview to Business Standard recently, Prasad said, ”We are formulating a policy for setting up call centres in small towns and rural areas. BPOs have mainly been restricted to seven-eight cities. We want BPOs to be set up in Gorakhpur, Jalandhar, Idukki, Aurangabad and other such small towns. The government will create a policy for enabling such call centres with due hand-holding and incentives to private players.”

  • Govt to offer subsidy of up to 50% of capital expenditure or Rs  1 lakh/seat, whichever is lower
  • Target to set up 45,000 seats in the next two-three years
  • Scheme outlay to be about Rs 500 crore, valid till March 31, 2017
  • New BPO destinations — Ahmedabad, Kochi, Bhubaneshwar, Thiruvananthapuram, Chandigarh and Indore