Hon’ble Prime Minister Narendra Modi addressed the Virtual Global Investor Roundtable (VGIR) on Nov. 05, 2020, which is organized by the Ministry of Finance, Government of India, and National Investment and Infrastructure Fund. He addressed the new reforms and opportunities for investors in our country and has released guidelines that simplify the compliance burden for the BPO sector and enables ‘Work from home’ for the ITES sector.
The Department of Telecommunication of the Government of India issued new guidelines with the intent to ensure a friendly environment for development and innovation in India and as a part of making India free from its old practices. In India, the strict and complicated compliances required for doing business is the greater hurdle faced by foreign investors and entrepreneurs. This has been addressed in the guidelines released by the government on Nov. 05, 2020.
“India’s IT sector is our pride. The prowess of this sector is recognized globally. We are committed to doing everything possible to ensure a conducive environment for growth and innovation in India. Today’s decisions will especially encourage young talents in the sector” said Hon’ble Prime Minister Narendra Modi.
“With an aim to qualitatively improve the Ease of Doing Business of the IT industry particularly Business Process Outsourcing and IT Enabled Services, the government has drastically simplified the Other Service Provider guidelines of the Department of Telecom. The new guidelines tremendously reduce the compliance burden of the BPO industry,” the release added.
It further said that the new guidelines are aimed at removing “unnecessary bureaucratic restrictions” in order to allow the industry to focus on innovative new products and solutions. “With this reform, the Government of India sends out a strong signal of its support to the IT industry intending to encourage increased investment in the sector.”
“The reform will certainly unleash the potential of our talented youth by making India as a preferred destination for Information and Knowledge Outsourcing Industry and would further the vision of ‘Atma Nirbhar Bharat’,” the release added.
The guidelines dated Nov. 05, 2020, exempts the Other Service Providers (OSP) like IT, ITES (Information Technology Enabled Services), BPOs (Business Process Outsourcing), and KPOs (Knowledge Process Outsourcing) from compulsory registrations. The guidelines exempt the requirement of a bank guarantee for any facility or dispensation for the OSP sector. The Requirement for static IPs, publication of network diagram, obligation of reporting, and penal provisions was also exempted under the new guidelines.
There are certain special flexibilities are allowed for OSPs connectivity with other OSP centers and with international OSPs, even interconnectivity between OSP centers of different OSP companies is also permitted. The guidelines further extended its permission for sharing the infrastructure by the Domestic and International OSPs.
The OSP sector is permitted to Work from home, Work from Anywhere in India, Infrastructure Sharing, and Centralised EPABX (Electronic Private Automatic Branch Exchange – a private telephone network used by the companies and organizations to communicate between employees and with clients) and shall be treated as Extended Agent Position/ Remote Agent of the OSP. These flexibilities in the OSP sector are very essential and much relevant at this time of the pandemic situation. Due to the COVID – 19, every IT/BPO firm was forced to enable ‘Work from Home’ to the employees.
The new guidelines issued by the Government of India has both advantages and disadvantages. The simplified guidelines may ease of doing business but it may also have certain negative effects as there are no regulatory measures of compulsory registration and several interconnection flexibilities may result in security breaches, etc., This is the first step in India achieving its 5 Trillion Economy goal.