Union Finance Minister Nirmala Sitharaman presented the Economic Survey 2023-24 on July 22. Following the presentation, Chief Economic Adviser Dr. V. Anantha Nageswaran held a press conference to address media queries regarding the survey.
As per the Economic Survey Report, Streamlined tax regulations and compliance procedures for foreign companies supported the enhancement of Global Capability Centres ( GCCs ). GCCs provide bespoke services in operation, product development and innovation. Today, GCCs operate across all IT, BPO, engineering, and software product development service lines, delivering complex work that requires a significant understanding of business context and imperatives.
The report states that in the last couple of years, more than 150 multinationals have set up their GCCs in India. India has come a long way to being at the epicentre of GCC growth.
Various agencies have projected that the number of GCCs would grow in the coming years, creating jobs as well. According to a PwC report, by 2028, the country is poised to have 2100 GCCs, with the market size of the centres touching USD 90 billion.
As per a study by Wizmatic, GCCs presently employ 32 lakh people, primarily engineers and scientists. They generated a combined revenue of USD 46 billion in 2023 and are estimated to generate a total revenue of USD 121 billion by 2030, roughly 3.5 per cent of India’s GDP. Out of this, USD 102 billion will represent export earnings.
Strategic interventions under various initiatives like ‘Digital India’ and policies for easing doing business have streamlined online approvals and licensing processes for GCCs. The report emphasises the importance of initiatives like streamlined tax regulations and compliance procedures for foreign companies for setting up GCCs, flexible labour laws, and single window clearance systems for faster approvals have eased the business process.
GCCs are increasingly evaluating tier-II towns to expand their operations, influenced by the reverse migration seen during the pandemic and the cost arbitrage offered by such relatively under-penetrated markets. As per a CBRE research report, during H1 of 2023, about 22 per cent of GCC centres were set up in tier-II cities, driven by the availability of existing and fresh talent.
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