India hikes outsourcing service charge to 7%
NEW DELHI, INDIA — The Ministry of Finance is mandating a fixed minimum service charge of 7 per cent for outsourced manpower procurement to address exploitation in the industry.
Under the government’s policy, the new minimum service charges for the procurement of manpower outsourcing service at 3.85% (3% profit plus transaction charges, which are 0.85% at present), as proposed by Government eMarketplace (GeM) — an online platform for public procurement in India.
“The procuring entities can also fix the service charge above 3.85% with proper justification on file, wherever required. However, such charges should not exceed 7% (including transaction charges) in any case. Least cost system (LCS) may be considered for procurement, wherever appropriate, especially in high value cases,” read the order.
