BPO sector may lose $1 billion on diesel cab ban: Nasscom

The Supreme Court's order banning non-CNG taxis in Delhi and the National Capital Region has the "potential to create the death knell for the BPO sector in the country" and lead to a possible loss of $1 billion, a group of Indian information technology services companies said.

The business model of the BPO industry requires a 24x7 operation that works on projects for global clients, the National Association of Software and Services Companies said in a letter to the Ministry of Road Transport and Highways on Wednesday.

The court's order could potentially lead to "loss of jobs, investment, foreign exchange and a huge reputational risk for not only the entire sector but for India," it said in the letter, a copy of which was reviewed by ET. The court's order, aimed at curbing pollution, has affected BPO companies that use fleets of cabs to transport their staff between their homes and offices.

These companies are mostly located in the NCR and employ about 6-7 lakh people in both technology and BPO sectors and provide indirect employment to over a million people, Nasscom said.

"In the two days since the order is being implemented, we have faced many issues of cabs being impounded, challans and fines being imposed, cabs with women employees at night being stopped, creating a security issue for women, lack of parking and traffic chaos as employees bring their own vehicles to work," Nasscom said.

The industry faces a potential loss of $1 billion if the issues associated with the diesel ban continue for 2-3 weeks, Sangeeta Gupta, senior vice president at Nasscom, told reporters.

The group urged the government to speed up the availability of CNG infrastructure in the NCR so that the industry could comply with the ban.

"There are a million direct jobs and more than 3 million indirect jobs at stake here, contributing $28 billion to the exchequer. Also, half of the workforce of this industry is women and their safety is paramount," said Keshav Murugesh, Group CEO of WNS BPO. As many as 65% of the BPO industry employees live in Delhi and need to reach their offices in Gurgaon and Noida.

Nasscom has asked the government to consider a deferred timeline for shifting diesel cabs to CNG or a phased implementation as per the Delhi government's plan, an exemption for employees to be picked up and dropped home during night shifts and greater clarity on the permits needed by cabs of the industry.

Almost half of the 80,000 cabs authorised to take tourists to destinations outside Delhi were affected by the Supreme Court ban on non-CNG taxis starting May 1. The BPO sector relies heavily on third-party cab services to transport their employees.

"We hope that the judiciary appreciates our predicament and resolves it by delaying the implementation... The infrastructure is not ready as on date to take on the ruling and if still implemented without careful planning around alternates, it can lead to disastrous consequences," Murugesh of WNS said.

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