– Rituraj Sinha
The Chair of FICCI Committee on Private Security Industry
SecurityLink India (SLI): What are the achievements of FICCI’s Committee on Private Security Industry over past 6 years apropos addressing the industry issues?
Rituraj Sinha: FICCI Private Security Industry Committee has worked relentlessly over the last 6 years to highlight policy challenges that the private security sector has been facing. The Committee has engaged at regular intervals with the Ministry of Home Affairs, Ministry of Labour and Employment, Ministry of Skill Development and Entrepreneurship, and the Ministry of Finance to create enabling policy framework for the growth of the security sector. Our annual industry events have also met with great success and helped highlight the issues of the industry amongst stakeholders.
SLI: What has been the success rate of the issues raised by the FICCI Committee to the government authorities?
Rituraj Sinha: FICCI Private Security Industry Committee could claim some degree of contributions in terms of securing re-categorization of the security workers as skilled workers under the Minimum Wages Act; notification of model rules for cash management operations under Private Security Agencies (Regulation) Act; reduction of GST rate on the fire and electronic equipment from 28% to 18%, amongst others.
SLI: What are the impacts of the Goods and Services Tax (GST) on the private security industry and what steps has the Committee taken to assuage it?
Rituraj Sinha: By and large, the security industry welcomes one nation one tax policy introduced by the Government of India. Even before the introduction of GST, the private security industry was largely compliant with Service Tax. We believe that the real issue with GST is the 18% slab rate. Security-as-a-service is a basic necessity, and it also has a very significant contribution in terms of job creation. As a matter of fact, it is supporting the government law enforcing agencies in a meaningful way. Keeping all these aspects in view, the GST rate for security services should be reduced to 5% from the existing 18% slab. A lower tax rate shall not only boost demand and aid job creation but also reduce the working capital burden on the security companies caused by the GST compliance.
SLI: What are the hindrances which are delaying the success on GST issue, even when the current Government believes that security is the basic necessity for the development of the economy?
Rituraj Sinha: The FICCI Private Security Industry Committee has strived very hard to establish credibility with the policy makers. On the basis of several rounds of discussions that we have had with them, one can say with reasonable confidence that Ministry of Finance has this issue at hand. However, it would not be appropriate for anyone outside the government to forecast any such decisions related to the sector, and by when the decision will be taken.
SLI: What are the scope and benefits of the Recognition of Prior Learning (RPL) scheme and how has it impacted/ benefitted the private security industry so far?
Rituraj Sinha: Private Security Sector is amongst top 5 employment generating sector in the country. Training and retraining are essential components of the security services. Lacs of guards have been working in the sector for years and have acquired all the relevant skills to perform their duties to an acceptable standard. However, most of them remain uncertified thereby hampering their career growth prospects. The Recognition of Prior Learning (RPL) scheme is a great initiative taken by the Government of India. It would bring dignity and career progression avenues to millions. At this Private Security Industry Conclave 2018, 17 small, medium and large companies executed MoU independently with the National Skill Development Council (NSDC) to certify over 3 lacs manpower under this scheme.
SLI: This year, the PSIC forum has included the concept of ManTech collaboration. What is its scope for the industry?
Rituraj Sinha: As the minimum wage escalates each year, the cost of security services has also been ramping up aggressively; and at the same time electronic security technology is getting better and cheaper. Customers’ inclination to adapt electronic security technology both for enhancing security apparatus, as well as for optimising loss is very natural. In the prevailing circumstances, it is essential for the private security companies to reinvent themselves from manpower providers to integrated security solution providers. At the current event, we discussed emerging trends in technology and we were pleased to have a very thought-provoking deliberation on ManTech at the event.
SLI: What is your take on the PSAR Act in terms of its viability and effective implementation for the industry?
Rituraj Sinha: The Private Security Agencies (Regulation) Act 2005 has given private security industry a level playing field. It has also provided us recognition in the eyes of the government agencies, media and public at large. However, in a vast country like India, the percolation of any central legislation down to the grass root level is a gradual process. Over the last several years, one has witnessed the structured approach adapted by the Ministry of Home Affairs to plug the loop holes and bring to fore the Private Security Agencies (Regulation) Act enforcement as an important agenda. We are hopeful that through greater engagements, PSAR Act enforcement across the country shall bring further tractions.
SLI: The recent RBI notification towards minimum operating standards for conducting cash logistics activities is causing abrupt incompetence to a majority of existing players in the field who have been competent so far. How do you address the issue?
Rituraj Sinha: We welcome the RBI guidelines for outsourcing of cash logistic operations. Over the last many years, incidents of internal fraud, looting and similar events have brought disrepute to the industry. This situation has prevailed because there was complete absence of minimum operating standards. Even as the Reserve Bank of India notification implementation will cause interim pain in terms of additional CAPEX and OPEX for the sector, this is in larger good for the industry, as well as for the country.
SLI: What are the future plans of the FICCI Committee for the private security sector?
Rituraj Sinha: The FICCI Private Security Industry Committee will continue to engage with nodal agencies to pursue agenda that will bring out a more conducing level playing environment for the private security companies to operate and thrive in. Private security is a 10 billion dollar sector and has a potential to grow at 20% YoY over the next decade. Our efforts will be to see that the policy environment is enabling, and for this policy reform would be an ongoing pursuit.