Lok Sabha Question No. 103 (STARRED), answered on 2018-07-25
Subject: Promotion of BPOs
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: UDIT RAJ

## GOVERNMENT OF INDIA MINISTRY OF  ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA STARRED QUESTION NO.*103

TO BE ANSWERED ON: 25.07.2018

## PROMOTION OF BPOs

## *103.         DR. UDIT RAJ:

Will the Minister of Electronics and Information Technology be pleased to state:

- (a) the achievements of India BPO Promotion Scheme in training and employment till date;
- (b) whether  this  scheme  provides  assistance  and  incentives  to  huge  profit  making private institutions/companies/ business houses at the cost of tax payers, if so, the details thereof and the reasons therefore;
- (c) whether small companies and start ups/new entrepreneurs are being discriminated/kept out of incentive sharing in comparison to bigger and established players, if so, the details thereof and the reasons therefore;
- (d) whether the Government intends to put in place an upper limit in the scheme to keep the big players out and whether there is a condition of a minimum turnover requirement, if so, the details thereof and the reasons therefore; and
- (e) the  steps  being  taken  by  the  Government  to  create  level  playing  field  for  all  in order to support participants/ contenders and also small and new entrepreneurs?

## ANSWER

MINISTER FOR  ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI RAVI SHANKAR PRASAD)

- (a) to (e): A Statement is laid on the Table of the House.

## STATEMENT REFERRED IN REPLY TO LOK SABHA STARRED QUESTION  NO. *103 FOR 25.07.2018 REGARDING PROMOTION OF BPOs

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(a): The Government launched India BPO Promotion Scheme (IBPS) and North East BPO  Promotion  Scheme  (NEBPS)  under  Digital  India  programme  to  incentivize setting  up  of  BPO/  ITeS  operations  across  the  country,  particularly  in  small  town/ cities,  to  create  employment  opportunities  and  promote  dispersal  of  the  industry. The BPO Promotion Schemes have allocated about 41,000 BPO/ITeS seats to about 160  companies,  resulting  in  setting  up  of  about  230  units  distributed  across  115 locations of 26 States & 2 UTs. Out of these, nearly 120 units have started operation for a total of about 23,000 seats distributed across about 60 locations of 21 States & 2  UTs.    The  direct  employment  reported  by  the  units  under  the  schemes  is  over 15,000  at  present.    The  employees  in  BPO/ITeS  sector  get  trained  on  industry standard processes to enable them to meet the business requirements of domestic and international clients.

The experience  gained thus  far  in  implementation  of  BPO  schemes  shows  healthy trend  relating  to  employment  of  women  and  persons  from  marginalized  section  of society indicating digital empowerment in smaller towns and cities.

- (b)  and  (c):  No,  Sir.    The  BPO  schemes  do  not  discriminate  among  Units (Companies/ LLPs/ Consortiums) as regards availing benefits.  In  fact, units of all sizes  may  avail  benefits  of  BPO  Promotion  Schemes.  The  schemes  have  been formulated with an aim to enable participation of units of all sizes including start-ups and new entrepreneurs. Further, the schemes have an enabling provision of forming consortiums. The schemes promote participation of local entrepreneurs also by way of special incentives.  As per the IT industry classification (NASSCOM), 97% of the eligible  bidders who participated in the schemes fall under the categories of Small and Emerging units and about 80% seats have  been allocated to these  units.    The small sized and emerging units are classified as having turnover less than USD 10 million, and between USD 10 million and 100 million respectively.
- (d) :  Yes, Sir.  In order to ensure wider and equal participation of the units of all sizes, there is a cap of 5,000 seats per bidder across the country for IBPS and cap of 1,500 seats per bidder across the NE region for NEBPS. A minimum annual turnover requirement  of ₹ 1  crore  has  been  kept  to  ensure  that  the  prospective  bidder  has requisite  wherewithal  to  set-up  infrastructure  and  sustain  operations.  Further,  the schemes provide reimbursement based financial support.
- (e):  A number of steps have been taken to ensure level playing field to all categories of prospective participants/ contenders, and in fact, the Schemes have been designed to ensure the same at every stage of implementation process.  Some of the key steps include:
-  The  minimum  turnover  of  a  prospective  participant  has  been  kept  at ₹ 1 crore;
-  A  number  of  Seat  Slabs  have  been  provided  for,  ranging  from  small  BPO operations (25 seats) to large BPO operations (over 1000 seats);
-  At  the  time  of  bid  evaluation,  Lowest  Bid  in  each  Seat  Slab  Category  is determined  separately  to  avoid  comparison  between  small  and  large  units/ operations; and
-  The requisite Bank Guarantee has been kept at 10% of the admissible financial support, with a further provision of 10% advance at the time of commencement of operations.

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