BPO units serving rural India defy global slowdown

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: While chips have gone down for the offshore business process outsourcing (BPOs) firms after the global IT slowdown, the domestic BPOs catering to large rural clientele are scripting a new success story, said L Somasundaram, Program Head, Economic Demography, Centre for Development Finance, Institute for Financial Management and Research (IFMR). Talking to FE, he said the knowledge-based local language BPOs servicing rural populace serve the twin purposes of finding IT-based employment to rural youths at a lower cost.

He said ICT entrepreneurship in rural India promises an impressive return of 30% to 35%. “Hindi belt BPOs operating on data entry and documentation in Haryana and Rajasthan manned by high school computer literate youths are good examples of IT penetration in local language reaching out to hitherto unreached segements of rural India through the BPO window. This is mainmly due to IT giants like google providing open source translation eliminating the software expenditure while setting up IT infrastructure for such enterprises. Local NGOs also should be credited for playing a pivotal role in sensitising youths about their IT potential in local language in such areas”, he added.

He said ICT entrepreneurship in rural areas is strongly linked to rapid urbanisation. “Studies found that Maharashtra and Tamil Nadu are leading states in urbanisation with TN economy since 1991 growing at 40%. While Maharashtra witnesses urban growth in cities like Mumbai, Pune and Nagpur, TN boasts of a strong tier-I line up that is expected to grow up to 50%. According to economic demography, an educated skilled villager finds immediate employment in nearby urban city thereby increasing his marginal propensity to consume by virtue of his employment”, he added.

Growth of this pattern of empolyment would entail an increase in rural purchasing power leading to a rural retail boom. Going forward, rural BPOs would be a perfect vehicle for capacity building for related businesses such as digital publishing in local language, documentation of herbal plants, knowledge dissemination on nutrition content, diary farming, organic farming, poultry farming, heritage tourism—all based on combining IT with native skills, he said.