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Government Issues Liberalised Guidelines for BPO & ITES Sectors

Government Issues Liberalised Guidelines for BPO & ITES Sectors

With an eye on qualitatively improving the ease of doing business of the IT industry, particularly the business process outsourcing (BPO) and IT-enabled services (ITES) segments, the Central Government has drastically simplified the other service provider (OSP) guidelines of the Department of Telecom.

The new guidelines seek to substantially reduce the compliance burden of the BPO industry, an official release of the Ministry of Communications has said.

The registration requirement for OSPs has been dismantled altogether and the BPO industry engaged in data-related work has been taken out of the ambit of OSP regulations. Besides, requirements such as deposit of bank guarantees, static internet protocols (IPs), frequent reporting obligations, the publication of network diagrams, 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. Additional dispensations to enhance flexibility for the Industry have been allowed.

“The new framework will provide a strong impetus to India’s industry and will make India one of the most competitive IT jurisdictions in the world. The new guidelines are inspired by Prime Minister Narendra Modi’s strong emphasis on ‘minimum government, maximum governance’, a Ministry of Communications spokesperson said.

India’s IT Industry is a major revenue earner 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. In 2019, the country’s IT and Business Process Management (BPM) industry generated over $175 billion in revenue.

Industry Welcomes New Guidelines
With this reform, the Central Government has sent out a strong signal of its support to the IT industry to encourage increased investment in the sector. According to people INFRASTRUCTURE TODAY reached out to, the step is expected to optimise compliance requirements and enable the industry to contribute towards realising a truly Aatmanirbhar Bharat or self-reliant India.

The move will also help augment the government of India to effectively respond to the ongoing socio-economic turmoil caused by the COVID-19 pandemic and help the information and communication technology (ICT) industry to deliver essential services remotely. The change is also expected to help promote new job opportunities, encourage an innovation ecosystem and support the development of an inclusive and diverse workforce.

Welcoming the government’s announcement, Dr. Sangita Reddy, President, FICCI, opined, “This is a landmark decision. It will go a long way in fostering the growth of IT, ITES and BPO industry.”

Ranjeet Goswami, Co-Chair, FICCI ICT and Digital Economy Committee, stated, “It is a very progressive policy change by the Government of India, which will enable a resilient and purpose-driven ITES industry to shape up to contribute towards an Aatmanirbhar Bharat.”

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