Infrastructure, key for a bubbling BPO

NEW DELHI: While the first wave of business process outsourcing (BPO) players, who came in primarily for low cost and high quality settle in, the second wave would call for rapid ramping up of operations and a solid infrastructure, which is likely to propel India to move a notch up the BPO value chain.

"Country infrastructure will play a vital role in attracting foreign investments in this arena. Even though the government has done a commendable job in attracting investments so far, it needs to do even better to match up with the MNC’s demand for a world class infrastructure," quipped CB Richards Ellis, Head for corporate strategy group, Ratul Kapur.

According to him, the need to ramp-up rapidly has put pressure on available space. "It’s important to make sure that we have good quality space ready for them as the lack of it would push them away to other destinations," explained Kapur.

He further suggested that the government also needs to look into areas like stamp duty rates. "On an average different countries like Philippines, Ireland or Australia are asking for 1.5 per cent to 3 per cent stamp duty, while Indian rates are much higher. So the government should work towards reducing it to a nominal level," he said.

The company estimates that over 100 million sq ft of land will be engaged in BPO activity within India by the end of 2008. Besides, steel and cement worth over Rs 28 billion will be needed to build infrastructure to encompass this land and it is likely to generate employment for over 0.5 million people in the country. "Developing country infrastructure is quite an essential block of the BPO pie we need to work on to achieve better results," Kapur said.

Is the government listening?

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