Page last updated at 15:40 GMT, Wednesday, 2 September 2009 16:40 UK

Business ventures thrive in rural India

By Zubair Ahmed
BBC News, Bagepally

Call centre in India
India's BPO industry is already worth $12bn

At first sight there is little to set apart the sleepy village of Bagepally.

It is as non-descript as any other small village you might find in southern India.

But it lies barely 100km (62 miles) from India's bustling economic powerhouse of Bangalore and the city's business acumen has clearly rubbed off on Bagepally.

This sparsely-populated hamlet is one of the few Indian villages which boasts a business process outsourcing, or BPO, unit.

India's BPO industry is already worth $12bn but rural BPOs like that found in Bagepally are part of a fresh push by Indian entrepreneurs to keep the industry competitive.

BPOs typically handle documentation and email queries for large foreign companies.

At a time when the world is reeling from a financial meltdown, rural BPOs are aimed at providing cost-effective solutions to foreign companies that want to outsource their work.

The model is cheaper than BPOs found in Indian cities, and because of this, they have been successful.

Keeping business

Where Indian and foreign companies might have looked to other countries for competitive deals, rural BPOs ensure business stays in India.

If I had worked in Bangalore I would have saved nothing and lived in penury.
Fatima Noor, Bagepally worker

"Rural outsourcing is doing better than expected. It gives us a cutting edge advantage over our competitors such as China and the Phillipines," says Murali Vullaganti, CEO of RuralShores, which runs the Bagepally BPO unit.

Having lived and worked for leading IT firms in the US for 15 years and Singapore for five years, Mr Vullanganti wanted to return to India and take the BPO world into rural India.

In 2008 he founded RuralShores with business partners including Chennai-based entrepreneur R Sujhata, who was the architect of the rural BPO model in Puttaparthi in Tamil Nadu state.

Bagepally village
Bagepally is the site of an innovative new rural business venture

It got a shot in the arm after one of India's leading banks, HDFC, bought a substantial stake in the company.

Mr Vullaganti says his company could offer savings of up to one-third on city BPO centres.

The complex which houses the Bagepally BPO unit is spartan - light years behind Bangalore's sparkling IT parks in terms of style and scale. But the place follows the same stringent security measures as city BPO centres do.

The 40-50 staff members, predominantly young boys and girls, are all from Bagepally and neighbouring villages. Their desktops are fitted with the latest technology.

Village pride

One worker, Fatima Noor, said she could not have asked for more.

Rural BPO company in Bagepally
Staff are pleased to be able to work locally

"If I had worked in Bangalore I would have saved nothing and lived in penury. This is close to my village, I continue to live with my parents and I save money on rent," she said.

They are all proud professionals. Many of the people who work here supplement their average income of 4,000 rupees (about $80) a month by doing other work, such as tending cattle or selling milk.

The centre offers career opportunities to those who are not in a position to make a bold move to the glittering city.

Two female workers in the Bagepally centre told me they would not have gone to the city even if the company was not in their village.

Their team leader Arun Shenoy is a proud manager and eager to encourage their potential.

"They are often more talented than their city counterparts. But it takes a bit longer to harness their talent."

Mr Shenoy said the success of the rual BPO model is attracting city BPO workers with roots in villages.

Suresh Singh, who once worked at a BPO centre in Bangalore, said he was happy to be working close to his village.

"Life was tough in the city. It was over-crowded and noisy. I am quite happy here," he said.

Boosting employment

But with all its cost effectiveness and cutting edge advantage, rural BPO centres do not offer voice services.

They focus on processing the documents of insurance companies and banks and handle the email queries generated on these companies' websites.

Mr Vullaganti believes the rural youth are best suited to processing papers and documents and answering queries through emails.

"Their spoken skills are not on a par with their city counterparts," he said.

Nevertheless, the rural BPO is an ambitious project. Mr Vullaganti said his company planned to set up 500 centres all over the country in the next five to six years.

He says there are 7.5 million graduates in rural India and he firmly believes the rural BPO industry will be in a position to employ at least one million of them over the next five years.

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