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Indian government boosts BPM and IT Enabled services

Strongly aiming to qualitatively improve the Ease of Doing Business of the IT Industry, particularly Business Process Outsourcing (BPO) and IT Enabled Services, the Indian government has drastically simplified the Other Service Provider (OSP) guidelines of the Department of Telecom.

The catalytic framework will provide a strong impetus to India’s IT and BPO industries and will make India one of the most competitive IT jurisdictions in the world. The new guidelines are inspired by the nation’s strong emphasis on Minimum Government, Maximum Governance. The move is also seen as a way to fulfil the vision of ‘AtmaNirbhar Bharat ’ (self-reliant India).

The new guidelines tremendously reduce the compliance burden of the BPO industry. The registration requirement for OSPs has been done away with altogether and the BPO industry engaged in data-related work have been taken out of the ambit of OSP regulations. In addition, requirements such as deposit of bank guarantees, the requirement for static IPs, frequent reporting obligations, the publication of network diagram, penal provisions etc. have also been removed.

Similarly, several other requirements, that prevented companies from adopting ‘Work from Home’ and ‘Work from Anywhere’ policies have also been removed. Facilitative dispensations to enhance flexibility for the Industry have been enacted. The reform has been designed to give optimise the potential of the country’s talented youth by making India a preferred destination for Information and Knowledge Outsourcing Industry.

India’s IT Industry is a source of pride for the country and the new guidelines are aimed at removing unnecessary bureaucratic restrictions to allow the industry to focus on innovative new products and solutions.

The IT-BPM sector in India stood at US$177 billion in 2019 witnessing a growth of 6.1% year-on-year and is estimated that the size of the industry will grow to US$ 350 billion by 2025. India has become the digital capabilities hub of the world with around 75% of global digital talent present in the country. India is the leading sourcing destination across the world, accounting for approximately 55% market share of the US$ 200–250 billion global services sourcing business in 2019–20. Indian IT & BPM companies have set up over 1,000 global delivery centres in about 80 countries across the world.

Revenue from the digital segment is expected to form 38% of the total industry revenue by 2025. The digital economy is estimated to reach Rs 69,89,000 crore (US$ 1 trillion) by 2025. The domestic revenue of the IT industry was estimated at US$ 44 billion and export revenue was estimated at US$ 147 billion in FY20.

With this reform, the Government of India is seeking to out a strong signal of support to the IT industry intending to encourage increased investment in the sector. With this investment-oriented focus, the government will continue to work towards ensuring efficient and effective norms for MSMEs, businesses, startups and entrepreneurs.

“All of us in the government will continue to work tirelessly to ensure efficient and effective norms for MSMEs, businesses, startups & entrepreneurs and make India one of the easiest countries to invest and create wealth,” said Amitabh Kant, CEO, NITI Aayog, in an interview in August.

The Ease of Doing Business (EoDB) index is a ranking system established by the World Bank Group. In the EODB index, ‘higher rankings’ (a lower numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights.

The research presents data for 190 economies and aggregates information from 10 areas of business regulation. Among the chosen 190 countries, India ranked 63rd in Doing Business 2020: World Bank Report.

The Government of India launched an ambitious program of regulatory reforms aimed at making it easier to do business in India. The program represents a great deal of effort to create a more business-friendly environment.

India has emerged as one of the most attractive destinations not only for investments but also for doing business. India jumped 79 positions from 142nd (2014) to 63rd (2019) in ‘World Bank’s Ease of Doing Business Ranking 2020’. Positive changes have led to this impressive improvement in India’s ranking in the EoDB index.


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