The India BPO Promotion Scheme (IBPS), under the Digital India Programme, provides financial support to companies for setting up Business Process Outsourcing (BPO) and Information Technology Enabled Services (ITES) operations. This article provides a detailed overview of the key aspects of the scheme as outlined in a Request for Proposal (RFP) document.
Scheme Objectives: Job Creation and Regional Growth
The IBPS aims to:
-
Promote employment opportunities for youth by incentivizing the IT/ITES industry, especially in rural and underserved areas.
-
Encourage investment in the IT/ITES sector to expand its reach and ensure balanced regional growth throughout the country.
Financial Support: Viability Gap Funding
The scheme provides financial assistance through Viability Gap Funding (VGF) to cover a significant portion of project costs:
-
Up to 50% of expenditure incurred on BPO/ITES operations towards capital expenditure (CAPEX) and/or operational expenditure (OPEX) on admissible items.
-
A maximum financial support of Rs 1 Lakh per seat.
Special Incentives:
Additional incentives are provided to promote inclusion, employment beyond targets and wider dispersal of facilities:
-
Diversity & Inclusion: Extra incentives for units employing women or persons with disabilities.
-
Employment Beyond Target: Incentives to units exceeding employment targets.
-
Wider Dispersal: Incentives for units setting up in rural areas and non-capital cities.
-
Local Entrepreneurship: Financial incentives are also awarded to consortia with local entrepreneurs from the state or UT concerned.
Eligibility Criteria: Who Can Bid?
Bidders must meet several criteria, such as:
-
Be registered in India under the Companies Act or the Limited Liability Partnership Act.
-
Commit to a minimum of 100 operational seats (50 for hilly regions) per location and may bid up to a maximum of 5000 seats across the country.
-
Demonstrate a minimum average annual turnover in the past three years. Specific turnover requirements vary based on the number of seats proposed.
-
If unable to meet the financial criteria, companies can bid through a consortium with a company meeting the criteria, with the eligible bidder holding a minimum 26% equity.
-
Companies must operate for at least 3 years after the commencement of operations.
-
Bidders must not have any history of blacklisting or fraud by the government.
Bidding Process: An Online, Transparent System
-
Bids must be submitted online through the CPP eProcurement Portal.
-
The process involves a two-bid system: a technical bid and a financial bid.
-
Bidders must pay a tender fee online, and submit proof with their technical bids.
-
Bidders must submit a Bid Security Deposit (BSD), which will be refunded to the unsuccessful applicants.
Evaluation: Multi-Stage Scrutiny
-
The Technical Evaluation Committee reviews and shortlists bidders based on their compliance with the technical requirements.
-
Financial bids of shortlisted bidders are then evaluated to determine the final allocation of VGF, with the lowest bid being preferred, in a Round-Robin manner, as per each Seat slab category.
-
STPI has final decision authority on interpretation of bid requirements.
Implementation Timelines: A Time-Bound Framework
The scheme sets deadlines for various stages of project implementation, including:
-
Commencement of operations within 6 months of IPA (In-Principle Approval), with an extension of 3 months subject to penalties.
-
Submission of proof of expenditure to receive financial support after the unit has commenced operation.
Key Contractual Terms:
Successful bidders are required to:
-
Sign a Master Service Agreement (MSA) with STPI
-
Submit financial, operational and infrastructure details to claim the grant.
-
Provide a Bank Guarantee of 10% of the approved financial support, which is released upon successful operation of the center for 3 years.
Conclusion:
The India BPO Promotion Scheme is a key initiative for promoting IT/ITES services and employment opportunities, especially in smaller cities and rural areas. By providing financial support to eligible entities and establishing a transparent bidding and evaluation process, the scheme supports the growth of India’s digital economy and offers employment and entrepreneurship opportunities for youth.