Bpos In India Essays

Contribution of BPO Industry to Indian Economy

Indian economy is the tenth-largest in the globe by nominal GDP and the third largest when it comes to purchasing power parity [PPP].  Agriculture sector is the largest employer in India, although its GDP share has been declining with time as of 2012-2013. India’s manufacturing industry has been a great contributor of its economy. The services sector which includes telecom, software, information technology, education, travel and other components of its economy has been great. The contributions of the BPO industry are matchless.

Business processing outsourcing [BPO] is a part of outsourcing that involves contracting of responsibilities and operations of a certain business functions to a third-party service provider. The BPO industry has grown rapidly over few years. India has been dominant in the industry as it is one of the mainstay growth catalysts of its economy. This industry has been impacting positively the lives of many people via active direct and indirect contributions in various social-economic considerations.

The BPO industry has played great roles in changing India’s image from a sluggish bureaucratic economy to a nation of inventive entrepreneurs and international players in the technology world.  Business processing outsourcing has become a buzzword for many Indians in 1990s. Today, the entire nation is quivering with the BPO fever. The industry was once focused on multinational companies, but it has grown tremendously into a broad based business venture that has enjoyed great success from the Indian IT software and service organizations. There are different kinds of services offered by BPO.


These are customer support, technical support, data processing, online research, telemarketing and insurance processing data to name but a few.  All in all, there are many ways through which BPO industry has contributed to the Indian economy and they are;

  • Creation of employment- The rapid growth of BPO has create large number of employment opportunities. Jobs vacancies have increased more than 8 times in the industry  and it has impacted lives of those who join employment sectors of choice more so when it comes to catering, transportation, security and much more.
  • Contributed in regional development-The impact of economy growth spurred by BPO is not only concentrated in urban areas, but also distributed to local areas in India. Local entrepreneurs are also enjoying different services supported by business processing outsourcing sector. Physical and social infrastructures are now available locally.
  • Contributed to growth of other sectors- BPO has played great roles in driving the development and growth of sectors such as telecom, real estate, media, healthcare and retail by creating demand for the output gained from these sectors.
  • Creation of wealth and new infrastructures- The industry has helped many entrepreneurs create wealth and being able to provide for their families. The industry has also made it easy for these entrepreneurs to also invest in real estates, automobiles and much more.
  • Empowering the diverse human assets- BPO is the largest private sector employer in India and it has controlled diverse talents in the nation sharing its growth with millions of Indians. In a sense, it has offered an opportunity for every individual to embrace his or her talent.

The BPO industry with its widespread expertise in developing global institution has contributed greatly to the Indian economy. It has foreseen growth in education, healthcare, financial, media and citizen service sectors. It has also not isolated any area in the nation whether poor or wealthy.

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Contribution of BPO Industry to Indian Economy

Business process outsourcing has become a global necessity. It involves the transmission of processes along with the related operational activities, tasks and responsibilities. It also refers to an increasing trend of taking the entire business operations or functions to self-owned and third party service. Additionally, it can be defined as a task of using third-party services by an organization to carry out its back office operations. Due to its benefits, the contribution of BPO industry to Indian economy is undisputed.

Contribution of BPO industry to Indian economy based on its growth

BPO industry has grown exponentially over the past years. This is largely attributed to the benefits it offers to an organization, mainly, increasing a company’s competitive advantage. Organizations across the globe including private sector and government departments are outsourcing their requirements to a service provider. In many cases, the provider is within geography of the state or other parts of the globe.

India is one of the countries that have emerged as a major outsourcing destination. This has been made possible because of quality and skilled manpower who can comfortably converse in English, cost arbitrage and highly innovative IT infrastructure.

BPO has enhanced economic growth in India and this has been quite tremendous. The demand for outsourcing services _from Western nations including the United Kingdom, Australia, New Zealand and North America has been significant thus, generating a lot of revenue to India. The role of BPO in the country’s economy shows that IT sector are major contributors to economic growth in India.

There has been a steady rise of BPO contribution in India from 1.2 percent to 5.4 percent. This is a clear impact of outsourcing services in India. Additionally, BPOs are aiming towards generating more income to India and IP creation. At present, BPOs in India are more focused on domestic segments as well as offshoring.

The major advantage to India’s local economy is also subject to exploitation of existing resources. This is why in the past ten years; India’s economy has grown especially as a result of IT-BPO sector. Current growth rate is estimated at 28 percent and more employment opportunities are still to be generated. This is estimated at 1.6 million.

Additionally, the role of BPO in India’s economic growth is set to make a major impact in the future. There are different driving forces that account for increase in foreign direct investments through BPOs in India and they include

  • More emphasis on real time and quality services
  • Cost effectiveness
  • Skilled sets and workers
  • Quality products and
  • Availability of English-speaking manpower

These are major features of BPO industry in India and they attract long term lucrative contracts. As a result, there are high earnings and in the end, major contribution of BPO industry to Indian economy. The industry as a matter of fact is a market leader and is improving in training of professionals. This is especially those who are interested in foreign languages as it helps the country to increase the number of skilled workers.

With more skilled workers, India will be better placed to sustain its global leadership. It will also generate more export revenues of up to USD 10 billion and much more in the coming years.

Contribution of BPO industry to Indian economy-balance of payment

India is focused on building its BPO industry. It is setting up more quality BPOs to create more employment opportunities to locals and foreigners. The country targets more youths to help eradicate poverty and to bridge the gap between the rich and the poor. This means that the role of BPOs in the country’s economic growth will further facilitate great maneuvering in the India’s balance of payments.

It is worth noting that the role of BPO in economic growth in India is at growth stage. Even so, India has benefited immensely from outsourcing. All is therefore, set in the country for a major contribution because the government fully supports BPO Sector in terms of financial support and growth, rural urban migration, openness to trade and quality education.

Due to government support, India has become one of the most widely sought after and successful BPO hubs. It is an essential part of national and global enterprises.


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