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Major reforms announced by Modi government, eases Work From Home norms and liberalises regulations for Other Service Provider sector

These provisions are expected to boost the IT/ITeS/BPO industry in India with several restrictions and requirements removed. This will make India an even more attractive destination for the IT/ITeS industry.

In a significant move aimed at reforming the BPO and ITeS Sector, the government of India has announced liberalisation of the regulatory regime for the ‘Other Service Provider’ Industry in the sector.

‘Other Service Provider’ an entity providing Application Services like tele-banking, tele-medicine, tele-education, tele-trading, e-commerce, call centre, network operation centre (NOC) and other IT-enabled services to its clients. The OSPs provide their services using Telecom Infrastructure provided by authorised telecom service providers, and there are guidelines on how such telecom resources can be used by the OSPs. The reforms have been brought to these guidelines of the Department of Telecom, simplifying the norms.

The government has removed the requirement for registration of Other Service Providers. The BPO industry engaged in data-related work have also been taken out of the ambit of OSP regulations. In addition to this, requirements such as deposit of bank guarantees, requirement for static IPs, frequent reporting obligations, publication of network diagram, penal provisions etc. have also been removed entirely.

Along with this, the govt has also removed several provisions which had prevented companies from adopting ‘Work from Home’ and ‘Work from Anywhere’ policies. Plus, Additional dispensations to enhance flexibility for the Industry have been allowed.

– Registration requirements for OSPs have been done away with altogether
– Requirement of Bank Guarantee done away with
– Requirement for static IPs withdrawn
– Frequent reporting obligations removed
– Requirements for publication of network diagram removed
– Penal provisions eliminated
– Enhanced flexibility for Industry has been introduced

These provisions are expected to boost the IT/ITeS/BPO industry in India with several restrictions and requirements removed. This will make India an even more attractive destination for the IT/ITeS industry.

According to earlier norms, Other Service Providers (OSPs) were required to make a security deposit of Rs 1 crore for each office to let its employees work from home. Companies were also required to obtain prior permission if large number of employees need to work from home. The companies were also required to obtain a “provider-provisioned” (virtual private network) VPN connection with static IP. Further, the companies were required to provide a “network diagram” with a list of components to the DoT, and such diagrams were needed to be counter-signed by the service provider they are using. Now these requirements are withdrawn.

OSPs were also required to obtain permission from DoT for starting work from home, but now that won’t be required.

Hailing the reforms, PM Modi tweeted, “Committed to furthering ‘Ease of Doing Business’ and making India a tech hub! GoI has significantly simplified Other Service Provider (OSP) guidelines of the Telecom Department.”

Ravi Shankar Prasad, the Electronics & Information Technology Minister, said that this move will boost the IT/ITeS/ BPO industry and create a friendly regime for Work from Home in India.

With the Coronavirus pandemic, Work From Home has become a norm across the world. After the revised norms, companies would be able to continue with WFH even after the pandemic is over.

Some of these measures, like relaxation from bank guarantee and disclosure requirements for employees working remotely were already announced temporarily due to Coronavirus. Now, those relaxations have been made permanent.

The IT industry was already demanding these measures, and the TRAI had also recommended to make the relaxations permanent.

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