BPO Role in India's Economic Growth

BPO Role in India’s Economic Growth has been tremendous, especially in the last few years, when the demand for outsourcing work to India has been significant among western companies.

The role played by BPOs in boosting India’s economy shows that the IT and ITeS sector have been contributing largely to the economic growth of India. The growth in the contribution of BPOs to Gross Domestic Product has shown a steady rise from 1.2% to 5.4%. It is hence evident that the BPO industry is making an impact on the Indian economy.

BPOs are aiming at contributing towards bringing in more earnings to the country and IP creation. Currently, BPOs in India are focused on the domestic segments and offshoring. The benefit to the local economy is subject to judicious exploitation of resources existing in these areas. The following are some useful statistics with regard to the growth of the IT-BPO sector during the past 10 years:

• 1997-98: US$ 4.8 billion
• 2006-07: US$ 47.8 billion
• Current rate of growth is 28%
• Employment to be generated -1.6 million

BPO Role in India’s economic growth is set towards making a significant impact in the time to come as well. The driving forces that account for the increase in foreign investments through the BPOs in India are:

• Emphasis on quality services
• Skilled sets and workers
• Cost effectiveness
• Quality products
• English speaking manpower

These features of the Indian BPO industry attract long-term contracts and as a result, there are high earnings which in turn result in major contribution to economic growth. As a matter of fact, the Indian BPO industry is leading in the market and is improving in the area of training professionals in learning foreign languages and increasing the number of skilled workers. This will give India the ability to sustain its global leadership and probably generate export revenues of USD 10 billion by 2010.

The setting up of more BPOs is also bringing in more job opportunities for the Indian youth. BPO role in India's economic growth will even facilitate great maneuvering in the country’s balance of payments.

BPO role in India's economic growth is definitely at the growth stage but is all set for a major contribution to the Indian economy, especially if the government supports the sector in terms of financial growth, openness to trade, rural-urban migration, and education.

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