Govt's new BPO scheme to create 1.5 lakh jobs. Serious effort or populism?

QUICK PILL

The scheme

• The government has decided to take the BPO sector to second and third-tier cities, in a bid to create jobs
• It has set aside Rs 500 crore for the new India BPO Promotion Scheme

The failure

• Prime Minister Modi had promised to create one crore jobs in his government\'s five-year tenure
• It has failed to do much in this regard, and even this new scheme will create only 1.5 lakh jobs

More in the story

• How this will impact employment and the struggling BPO sector
• Is this a serious effort at job creation or merely a populist move?

When Narendra Modi came to power, he promised to generate 20 lakh jobs every year. That would mean a total of one crore jobs in his government's five-year tenure.

Now, almost two whole years later, one of the biggest criticisms of the NDA government is its failure to create jobs.

But here's a drop in the ocean - the India BPO Promotion Scheme.

The next time you get a call about a bank deposit update, or when you call up to enquire about your insurance, the person speaking to you won't be sitting in NCR, Hyderabad or Mumbai. He or she could be at a BPO office in Varanasi, Allahabad, Patna or Gaya.

Details of the scheme

The Central government has decided to take BPOs to second and third-tier cities. As of now, a budget of almost Rs 500 crore has been allocated for the scheme.

The Ministry of Communications and Information Technology is pushing it to the smaller cities/mofussil towns. The scheme would be implemented in 27 states and Union Territories.

Also read: The Modi Plan: five clear steps to job creation

The Software Technology Parks of India (STPI) is the nodal agency for the implementation of the scheme.

"This scheme would create around 1.5 lakh direct jobs, considering three-shift operations. It would also create many indirect jobs. The experiment has already been done in the North-Eastern states, and this is the right time to take it to other cities in India," Dr Omkar Rai, director general of the STPI told Catch.

He added: "The idea is to create 48,300 seats in different cities, which are not BPO hubs as of now. This means we are looking towards small cities across the country. This is going to benefit people in these small cities. We will succeed in generating good number of jobs."

At present, 10 cities are BPO hubs - including Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, Pune and NCR. Other than these cities, the BPO scheme has also been promoted and pushed in the North East.

The ministry has, thus, decided to keep these cities and the North East excluded from the scheme.

Politics over jobs

The scheme is yet to be implemented, and the jobs expected to be created under the scheme won't really go a long way towards fulfilling the Prime Minister's promise or people's thirst for more jobs.

However, it will help the government make a political statement, and serve the purposes of propaganda.

The visibility and activities around these hubs in the small cities will actually help the government in making people believe that "the PM and the government are serious about the promises made to the people. Jobs are coming to their cities, so people need not migrate. This would be a new thing for these cities, and people will see it as the initial indication of jobs, growth and development," explains a BJP leader.

Indeed, the scheme has a small fund, and would lead to a 'minimum investment, maximum popularity' kind of set up for the government.

In reality, it doesn't look like the scheme will address the core issue facing the country right now - poor job generation.

The BJP leader disagrees. "This is just one scheme, which is promising more than 1.5 lakh jobs. But this is not the only scheme which is generating jobs. We will generate and deliver the jobs we promised to the people," he says.

Also read: Lost jobs, shut factories: India's dark export story

Boost to BPO industry?

The BPO industry in India is ailing. This has even affected the real estate sector - cities like Gurgaon are prime examples.

However, the government hopes that going to smaller cities would build an IT-friendly image for it. If it bears some fruits before 2018, it will help build a positive perception about the government.

The question really is whether this drop in the ocean can quench the thirst for jobs.

Edited by Shreyas Sharma

Also read: Declining exports, few jobs, falling rupee: Is this 7.5% growth, Mr Jaitley?