Govt to probe poor response to BPO subsidy scheme

Barring Tata Consultancy Services, none of the bigger information technology companies showed interest

The central government’s scheme for incentives to business process outsourcing (BPO) operations, termed the Indian BPO Promotion Scheme, has got a poor response. The reason why is being investigated.

Administrative approval for implementing it was issued in end-2015. In all, 48,300 seats were to be distributed among states in proportion to each’s population, with financial support up to Rs 1 lakh for each seat in the form of viability gap funding, with an outlay of Rs 493 crore. Excluded from the scheme wereg Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, the entire National Capital Region  and Pune.

A Request for Proposal was issued in April and companies were to give bids by June 30, later extended to July 8. The bids were opened on July 11.  

Although about 100 companies participated in the pre-bid conference and expressed interest, the final number of bids was for only 12,000 seats. Barring Tata Consultancy Services, none of the bigger information technology (IT) companies showed interest.

“Involving the corporate sector in a social objective is always difficult. They are apprehensive and keen to get the best bargain. We are looking into the reasons that led to withdrawals. The government is keen on inclusiveness to the growth,” electronics and IT minister Ravi Shankar Prasad told this newspaper.

An official in Software Technology Parks of India (STPI), the scheme’s implementing agency, said as companies were not allowed to expand under it, the big names weren’t so interested. Some, including HCL and Tech Mahindra, had sought clarifications and STPI was in in contact with them., he said.

A senior official in the electronics and IT ministry said the sector was asking for priority in allocation of government work. He said states and district authorities would also have to be involved.

He said the demand to permit expansion had not found favour with the NITI Aayog.