Bangalore: Infosys director and Progeon chairman T V Mohandas Pai on September 12 warned that a "social churning" would take place if 80 per cent of the people in the country miss the "gravy train" of economic progress, which the minority population with English education gain due to the phenomenal growth in the service sector.

"If the 80 per cent of the population miss getting on the 'gravy train', it will get into serious problems unless the people in the ancillary services area pass on the benefits and take them along by training and providing opportunities," Pai said in his keynote address on ancillary services to Business Process Outsourcing (BPO) and Information Technology Enabled Services (ITES) sector at the Confederation of Indian Industries (CII) National Service Sector Conclave.

Asserting that India had the largest number of people (300 million people) in the economically productive age group, he said the BPO industry would drive the country's economic growth in the country.

"Of the top 2,000 companies with a turnover of $ 10 trillion, about 10 per cent to 12 per cent of their expenses go on sales and general administrative expenses, that is about $ one trillion to $ 1.2 trillion. Even if we tap a margin of that potential, the BPO industry in India has a potential of generating two million jobs with a salary outgo of Rs 40,000 crore by the end of the decade," Pai said.

He said the BPO industry in 2002-03 was $ 2.1 billion, estimated to touch $ 3.2 billion this fiscal and estimated to generate $ 20 billion by 2010.

Pai said that the BPO industry in Bangalore currently employed about 40,000 people and expected to reach two lakh in the next five years.

The IT and ITES industry, he said, generated jobs to about 1.5 lakh people earning revenue of Rs 12,500 crore and of which Rs 6,500 crore was being reinvested.

Quoting a National Association of Software Service Companies (NASSCOM) report that every job in a BPO generated an additional job in ancillary services, Pai said there was enormous potential in generating in transport, food services, facility management and security services.

He also said the growth was in cities and regions where there was high quality of life and infrastructure and cited the "golden triangle" of Bangalore, Hyderabad and Chennai, Gurgaon and Noida, Mumbai and Pune.

Pai said the ITES services business would double or treble in the next three years and called on ancillaries to improve their processes, standards and systems and be professionals.

"We expect the same kind of service from the ancillaries what our customers expect from us," he said, adding that it was highly competitive business with low margins.

Pai said Indian ancillary services providers could also export their expertise in the US, Europe and South East Asia.

PTI