When Bangalore outsources to Bagepalli

Off a desolate stretch of National Highway 7, two-and-a-half hours from Bangalore, outside a small town called Bagepalli stands one of India's earliest rural back office centres.

Run by a company called RuralShores, the modest brick-and-concrete structure stands a hundred metres off the highway, a surreal setting for a BPO. Outsourcing, the shift of all kinds of work, including BPO jobs from the West to lower-cost countries like India, is a decade-old phenomenon. Now that same trend looks set to cascade into rural India.

The months-old Bagepalli centre is a three-room affair equipped with a dozen ceiling fans whirring at full speed. The power supply here is stop-go, so each of the rows of computers is equipped with its own battery back-up.

The office has no air-conditioning, cafeteria or soda vending machines, the usual trappings of India's back office companies in Bangalore, Gurgaon and elsewhere.

Many of the employees—'process associates'—are high school graduates literate in Kannada, who live in the neighbouring villages. Housekeeping is done by barefooted Venkatraya, whose work attire is a betel-stained smile, a vest, fold-up trousers and a towel wrapped around his head, turban-like.

But these remarkable ingredients could combine to lead up to a rural back office revolution in the Indian countryside.

Bagepalli is the first of 500 such centres that RuralShores plans to set up in the next five years. Each will have 150-200 employees that will eventually total 75,000 jobs.

"Providing a livelihood to rural youth could have a huge multiplier effect," says Murali Vullaganti, CEO of RuralShores. In a small town, 200 people earning Rs 4,000 each month could stimulate further economic activity, he says.

Domestic banks and insurance firms are already attracted to the low-cost rural BPO model. RuralShores' customers include the loyalty card firm i-mint and the Indian subsidiary of the London-based IT firm, Logica.

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