BPO Promotion Scheme

BPO promotion scheme is a subsidy scheme under the Digital India Programme which seeks to establish nearly 48,300 seats in the BPO or ITES industry. To operationalise the BPO promotion scheme an outlay of Rs.493 crores has been provided by the Government. The outlay of Rs.493 crores is distributed amongst the States based on population.In this article, we look at the BPO promotion scheme in detail.

Eligibility for BPO Promotion Scheme

To be eligible to apply for the BPO promotion scheme, the application must be a private limited company or one person company or limited company registered in India with a positive networth. The applicant must also be willing to setup a new BPO or ITES operation with a minimum of 100 seats at one location and be committed to operating the same for a minimum period of 3 years. In addition to the above, the applicant must have achieved a minimum average annual turnover of atleast Rs.2 crores during the last three financial years. A minimum average annual turnover of Rs.1 crore is permissible for applicants setting up 50 seat BPO in the states of Himachal Pradesh, Jammu and Kashmir and Uttrakand. It is very important to note that under the BPO promotion scheme, a BPO cannot be setup in the following cities and their Urban Agglomeration (UA) area:

Bengaluru
Chennai
Hyderabad
Kolkata
Mumbai
NCR (incl. Delhi, NOIDA, Gurgaon & Faridabad)
Pune

Subsidy under BPO Promotion Scheme

A subsidy of upto Rs.1 lakh per seat is provided under the BPO promotion scheme. The subsidy is provided in the form of capital support for setting up of a BPO / ITES operation. The following types of items can be purchased with 50% capital support from the government:

Servers with OS
Software and Hardware per license cost for BPO/ITES Business operations
Networking Equipment (Switches, Routers, Firewalls, Voice/Video Conferencing Gateways)
Workstations (Desktop, Laptop, Tablets, IP phones, Headsets)
Data Storage
Structured Cabling
UPS
Printer, Copier, Scanner & Projector
Refrigerator & Water Purifier
Fire & Security Items
Computer Furniture
Electrical wiring & fittings
Central Air-conditioning equipment, air-conditioning System
Captive Diesel Generating Set and transformer of capacity commensurate with the actual requirement of the unit , solar power / Non-conventional Energy Generation Set (OPTIONAL)*
Fax Machine
Private automatic branch exchange
Data Communication Equipment, Modem & VSA
Other misc. goods not exceeding 5 % of the total cost of above items including Tools, kits and spares

In addition to the capital expenditure, a special incentive is provided by the Government for the following attributes:

Women and Persons with Disability

In the case of 50% Women Employment, an additional 5% special incentive is provided as capital support. In case employment of persons with disability (4% of total workforce), an additional 2% incentive is provided.

Higher Employment Generation

In addition to the above, if employment generation is 2 times the number of seats, an additional special incentive of 5% is provided. For employment generation of 2.5x and 3x of the number of seats, 7.5% and 10% additional special incentive is provided.

Rural Areas

A special incentive of 5% of eligible capital support is provided for units setting up BPO/ITES operations at locations other than the State Capital.

Local Entrepreneurs

Special Incentive (5% of eligible capital support) is available for units setting up BPO/ITES operations as a consortium with local entrepreneur (Domicile of State/UT).

BPO Promotion Scheme Application Process

To apply for the BPO Promotion Scheme, the applicant must submit a bid online in the two bid format as per the RFP with technical and financial bids with bid security of Rs.5000 per seat. Once the bid is received by the Bid Submission End Date, it will be opened online by a duly Constituted Committee setup by the Software Technology Parks of India. The bidder will be at liberty to be present either in person or through an authorized representative at the time of opening of the Technical Bid with the Bid Acknowledgement Receipt or they can view the bid opening status online at their end. Based on the recommendations of the Committee, seats will be allocated to winning bidders.

Disbursement of Subsidy

For winning bidders, the subsidy will be disbursed in two instalments. The first instalment of upto 50% of the total capital support, subject to at least 50% of employment target from the commencement of operation can be claimed anytime after three months from the commencement of operation but not later than six months. The second instalment, subject to meeting at least 50% of employment target from the commencement of operation can be claimed anytime after the expiry of three months period (but not later than six months) from the date the of claim the of first installment.

BPO Promotion Scheme - Eligibility