How about ‘Serve in India’?

The Prime Minister has launched a laudable initiative with his ‘Make in India’ campaign. However, with India at 142 out of 189 countries ranked by the World Bank for ease of doing business, and standing a wretched 184 in dealing with construction permits and 186 in enforcing contracts, it’s clear the government has a tough task.

Where we have a competitive advantage is in the IT and BPO sectors. While the IT success story has been well documented, it’s the domestic BPO sector that will be the key to providing jobs and pushing growth in India.

According to the latest estimates, the total number of people directly employed in this sector is about 1.5 million whereas the number of people employed in ancillary industries such as security, transport and catering is over four times this number.

The current size of the industry is $26 billion, of which the domestic market is close to $4 billion. By 2020 we expect the total BPO revenue to reach $50 billion.

A large number of countries are rolling out the red carpet for BPO companies. When we were setting up a BPO centre in Kentucky, in the US, we were received as state guests, incentives were provided and we even stayed at the governor’s mansion.

Countries across the spectrum, from Costa Rica, Jamaica and South Africa to Poland, Malaysia and the Philippines have provided job creation grants, tax incentives, training stipends and a host of other things. Many Indian companies have set up large centres in the Philippines; many of these jobs could have remained in India.

The Central and State governments spend hundreds of crores on advertising in print, television and outdoor media both in India and abroad to promote tourism. The benefits are unclear but if a fraction of this money is spent in building the ‘Serve in India’ brand, the economic benefits will be manifold.

The government should sponsor major outsourcing conferences in key cities in the US and Europe where we invite speakers of the calibre of Jeff Bezos of Amazon and Masayoshi Son of Soft Bank — icons who are sold on India. This will remove misconceptions among many companies who have gone elsewhere and further ignite interest in India’s BPO capabilities.

BPO companies are setting up delivery centres in tier 3 and tier 4 cities providing employment where it is sorely needed. As most call centre queries and requests from non-metro customers come in the local language, knowledge of English is not essential. In fact, many employees have only studied till high school. They will find it difficult, if not impossible, to obtain jobs elsewhere. After working for a year or two, many of them get better and higher paying jobs in the bigger cites and are set for life.

As our newest BPO centre in a tier 4 town was inaugurated, I watched the parents gaze with love and pride as employment certificates were being given to their children. These parents were mostly illiterate and were in the main sharecroppers or marginal farmers. We were unquestionably changing lives.

The BPO industry makes excellent use of land. This is particularly relevant in light of the controversy over the land acquisition Bill.

A 200,000 sq ft facility can be built on less than an acre of land. This facility can house 4,000 seats and roughly employ about 6,000 people. Contrast this with the Posco Steel complex to be set up in Odisha. It requires around 4,000 acres and in the first phase will employ 7,000 people only.

Another major plus point is the fact that a large part of the revenue generated is ploughed back into these cities and towns through wages and salary, rentals, electricity charges, and taxes and levies. This will help regenerate them. This will also stem the flow of migration to the bigger cities and metros.

Paradoxically, many large domestic BPOs are either shutting shop or cutting back on contracts as they find their margins squeezed, with no government support forthcoming.

The Centre has just notified a policy for providing capital support for call centres set up in the North-East.

While it is a step in the right direction, clients will be careful because of security and logistical challenges. The government should, therefore, extend this policy to tier 3 and tier 4 cities across India.

Domestic BPOs also want the government to lessen the burden of training agents. Unlike global clients, those in India only pay for the agents once he or she is productive and not for training. Training can go to several weeks and is a constant process because of agent attrition.

The government should provide a one-time reimbursement for every candidate trained and hired by BPOs in these cities.

Another major cause for concern is the increase in minimum wages. These are administered on an ad hoc basis without any set criteria and differ widely from State to State. While it is no one’s case that minimum wages should not be revised, the arbitrary nature of the same hurts BPOs. Clients want stable pricing through the duration of the contract. Large BPOs that follow labour procedures to the letter find their margins squeezed and are getting out of the business. However, we need these very companies to provide good quality of service, new technology and large scale employment.

A major cost, after salaries, is rent. In light of the number of vacant and underutilised government buildings lying around, State governments can do their bit to set up domestic BPOs by charging a token amount as rent for the first five years, subject to the creation of a minimum number of jobs.

In the effort to improve quality of governance, the Centre, and the State governments are coming out with helplines for government and public sector utilities. These can be reserved for tier 3 and tier 4 BPO centres. This will complement private sector clients and boost employment. In places such as Srinagar, our BPO is the largest private sector employer.

In short, domestic BPOs can provide three to four million direct jobs and many more ancillary ones in non-metro cities and towns. It will harness our demographic dividend. With a forward looking policy and the strong support of government, the domestic BPO industry can be the key agent of change in India.

The writer is the CEO of one of India’s largest BPOs. The views are personal

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