IT companies want work from home relaxations to be made permanent | Economic Times

New Delhi: India’s top IT services companies are seeking permanence for relaxations in certain key norms, which allowed the industry to move lakhs of employees to a remote working model in March, when the government imposed a lockdown to stem the spread of Covid-19.Companies including Tata Consultancy Services, HCL Technologies, Wipro, Cognizant, WNS, Genpact and Infosys, with units operating from Special Economic Zones (SEZs) and Software Technology Parks of India (STPI) are seeking regulatory clarity in order to optimise their operations and quickly move to a blended model with workers operating from both home and office, as the pandemic continues to rage.Tax ExemptionsThe industry estimates that it may not need up to 30-50 per cent of the real estate that it currently occupies if the relaxations are made permanent. In letters sent to the ministries of commerce and electronics and IT at the end of June, industry lobby National Association for Software and Services Companies has sought clarity on whether work-from-home can be enabled on a permanent basis by units operating from SEZs and STPI.76824799Nasscom has also sought clarity from the finance ministry on the status of income tax exemptions granted to units in SEZ, as a bulk of the work is now done from home.A government official said that the concerns raised by the IT industry are under consideration.76824800"We have received their representation, it is under consideration. We want to support the industry so that there is no disruption in their functioning,” said Omkar Rai, director general of STPI.Nasscom has also sought an amendment in SEZ rules to allow employees working from home to take IT assets such as laptops out of office on a permanent basis. Similar requests have also been made regarding STPI, which comes under the purview of the ministry of electronics and IT.“IT (companies) can implement a blended work model, repurpose or give up excess real-estate only when they have certainty on long-term policy across SEZs, STPI and telecom,” said Ashish Aggarwal, head of public policy at Nasscom told ET. The Department of Telecom had also relaxed norms for other service providers (OSP) that enabled employees of back-office firms to deliver services from home. Nasscom has requested that the waiver until July end, also be made permanent.Infosys, HCL Technologies and WNS declined comment while TCS, Wipro, Cognizant did not respond to ET's queries.A Genpact spokesperson said, “Remote work not only reduces operational risk, but it helps companies decongest large cities, opens up opportunities to larger portions of the workforce, and increases agility.”Since March, when India’s IT industry moved over 90 per cent of its 4.3 million workforce to work remotely, IT companies have indicated that the new normal would be a lesser number of people coming to office and more people working from home.Real estate experts said many companies are looking at reducing office space due to the pandemic.“Work-from-home has become the new reality and several IT/ITeS firms have already declared it as an option for the remaining part of the year. This has resulted in several firms reviewing their real estate across cities,” said Anuj Puri, Chairman of Anarock Property Consultants.Around 12-15 per cent of real estate in premium office spaces are likely to be freed up in the short term, until a vaccine is introduced to tackle Covid-19, he added.The top 7 cities of India have around 550 million square feet of premium office space used by IT and IT services firms, according to research by Anarock. It also says that 42 per cent of all commercial real estate was leased by the IT and ITeS companies last year.India’s largest IT services provider Tata Consultancy Services (TCS) expects three fourths of its 4.5 lakh employees to be working from home by 2025, while Infosys expects at least a third of its staff to deliver services from home. Wipro is looking at a blended model, while HCL Technologies expects only half of its workforce in office. IBM was looking to reduce its office space by half, ET reported on June 18.These companies and captive centres in India for some of the world’s largest banks such as Citi are also seeking clarity on the regulatory issues. Jagdish Mitra, chief strategy officer and head of growth, Tech Mahindra said, “A long-term holistic policy on a ‘hybrid work model’ will help us accelerate our transition to future of work and define data security norms while ensuring employee safety and productivity.”A spokesperson for Citi declined to comment for the story.