BPOs should move to smaller towns: Ravi Shankar Prasad

According to some estimate if the BPO industry moves to smaller towns it will save around 10 to 25% of the costs

Union Electronic and IT Minister Ravi Shankar Prasad on Monday said BPO industry should move to small towns where overhead costs are less compared to big cities.

"...country is gradually moving towards a citizen oriented e-governance model, which will be based on reduced physical interface with the government office, the needs for effective citizen support would be required. This demand can be met by the call centres.

"Moreover, running BPO operations in big cities has become expensive due to rising cost of real estate and other essential amenities. To mitigate this cost factor the BPO industry should move to small towns where these overheads are lesser. 

According to some estimate if the BPO industry moves to smaller towns it will save around 10-25 per cent of the costs,a statement said quoting the Minister.

The government has approved India BPO Promotion Scheme (IBPS) under the Digital India Programme to create employment opportunities and promotion of BPO/ITES operations across the country to secure balanced regional growth of IT and ITes industry with an outlay of a, A493 crore. The scheme targetted to provide employment to 1.5 persons across the country.

Inaugurating networking workshop on India BPO promotion scheme, he said that "India holds 38 per cent share in global BPO industry and stage is set for massive growth of the sector".

The scheme provided capital support along with special incentives upto Rs 1 lakh per seat in form of Viability Gap Funding (VGF). About 48,300 seats have been planned with distribution across states and UTs based on population percentage according to Census 2011.

It excluded metro cities along with their urban agglomeration viz. Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, Natioal Capital Region, Pune and North Eastern states.