PRIVATE SECURITY INDUSTRY

Job Creation and Skill Development

A Report
FOREWORD

The private security sector has emerged as a major industry by virtue of employment of large manpower, both skilled and
unskilled, to meet the burgeoning demand of the corporate sector. With national security assuming greater criticality and
lower police to people ratio in the country, private security industry, with large manpower, can act as extended arms of law
enforcement agencies. This will help relieve police forces from non-critical duties to focus on core areas.

With the anticipated growth of the industry, the employment opportunities are tremendous. Since, majority of the workforce
employed is in the unorganized sector, the potential for skilling is evident. Current time requires private security personnel
to multitask and use technology to perform security, safety and facilitation functions. Skill development, especially
Recognition of Prior learning (RPL), reskilling and upskilling are key issues before the private security sector. Therefore,
investment in human capital is vital in preparing this industry to take on greater responsibilities.

The regulatory framework governing this industry also needs proper enforcement. Unorganized segment has largely remained
unchecked and players usually skip adhering to mandatory compliance requirements, which creates a detrimental impact for
all stakeholders including employees and clients. It is imperative, therefore, for the governments to ensure strict
enforcement of the regulations that will improve service delivery quality levels as well as work environment for the security
personnel.

This Report highlights the current state of the private security industry with suggestions and recommendations. I would like
to acknowledge the efforts of industry members, who have provided valuable inputs and deep insights in the report. We are
confident that the information presented in this report will serve as a valuable reference to all stakeholders.

MR. DILIP CHENOY

Secretary General
FICCI
FOREWORD

The Indian economy, as per the latest World Bank figures, is now the world’s 6th largest economy and is expected to grow at
7.4 % in 2018 and 7.8 % in 2019. With the economy and businesses growing, security needs are also expanding, which is
further necessitated by the ever-increasing security risks and related threat perceptions. Deployment of specialised
personnel and systems to prevent and manage security risks and threats including accidents and incidents are vital for
peaceful operations at a place. Therefore, the need for implementing security measures and systems at public places such as
airports, railways & metro stations, shopping malls & markets, hotels, and public utilities as well as industrial complexes,
commercial spaces, offices, and residential blocks has risen multifold.
Indian Private Security Industry (PSI) has also expanded at a Compounded Annual Growth Rate (CAGR) of around 20% over the
last decade by adding new players in the field as well as scaling their operational capabilities. In fact, Private Security in
India is the 2nd largest sector, after agriculture, in terms of employment, with close to 09 million employees. Traditionally,
it has been an unorganised sector with around 40% of the market share being with the organised players. However, the
industry is progressing towards being organised as the consumer demand for security is gradually evolving from a mere guard
to a professional and skilled guard, trained for movement of men and material, fire incidents, medical exigencies, etc.
Further technology is progressively playing an ever-increasing role in the value-added services being offered by the industry
that include artificial intelligence, internet of things, hi-tech surveillance systems, biometric technologies, remote sensors,
cyber security, etc.
On behalf of BDO in India and FICCI, I take pleasure in presenting this report, that brings out a detailed overview of the
Indian PSI, emphasising their significance in skill development and job creation in the country, existing policy frameworks
and a need for an able regulator along with the impact of recent changes like introduction of GST, impacts of shift from
unorganised to organised segment and the new technology innovations that are being adopted by the industry. I hope that,
through this report, you will be able to garner a view of the PSI in India and gain an insight into the recent trends as well as
issues and challenges faced by the industry.

CDR GAUTAM NANDA

Leader - Aerospace, Defence & Security
Associate Partner - Government Advisory
BDO India LLP
TABLE OF CONTENTS

Industry Overview and Structure…………………………………………………………………………………………………..………………………………………1

Skill Development and Job Creation………………………………………………………………………………………………………………………………………5

Policy issues concerning Private Security Industry (PSI)…………………………………………………………….………………………………………..11

Goods and Services Tax (GST) and its impact on PSI………………………………………………………………………………………….………………..15

Shift from unorganized to organized sector………………………………………………………………………………………………………………………….19

ManTech-Integration of Manpower and Technology…….………………………………………………………………………………………………………..23

Glossary………………………………………………………………………………………………………………………………………………………………………..………..34
INDUSTRY OVERVIEW
AND STRUCTURE
 Report | Private Security Industry 02

INDUSTRY OVERVIEW

The demand for security services is increasing due to

Ratio of personnel in Private
rising urbanisation, the real and perceived risks of crime Country
and terrorism, belief that public safety measures are Security to Police Force *
insufficient, and growth of a middle class with assets to India 83:17
protect and means to pay for supplementary security
measures. The security service market is also supported South Africa 71:29
by an improved economic environment and building
construction activity. Brazil 71:29

Japan 65:35
The Indian personal security market was estimated at INR
57,000 crore (~USD 8.8 billion) in 2016 and is likely to China 65:35
touch INR 99,000 crore (~USD 15.2 billion) by 2020 and INR
1.5 lakh crores (~USD 23.1 billion) by 2022 (as per latest United Kingdom 61:39
industry estimates). Apart from revenue growth, the
United States 58:42
Private Security Industry (PSI) is also evolving in its
employment practices. Leading industry players are Russia 57:423
setting new standards in the industry by focusing on
training and skill development of their people and Germany 50:50
customer satisfaction, establishing employee welfare
funds, ensuring timely payment of salaries, and defining * https://www.forbes.com/sites/niallmccarthy/2017/08/31/private-
security-outnumbers-the-police-in-most-countries-worldwide-
career progression paths for high-performing employees. infographic/#4e4fed94210f

The private security industry is amongst the largest

employers in India, employing almost 8.9 million people,
with the potential to employ 3.1 million more by 20221.
The PSI also has a unique distinction of being the largest
corporate tax contributor to the National Exchequer.

As per a study conducted by The Guardian2, the global

market in the year 2017 was USD 180 billion and is
expected to be USD 240 billion by 2020. In contrast, the
Indian Private Security Industry (PSI) is expected to grow
faster at about 20% CAGR owing to the changing landscape
of the sector in India. However, there remains a shortfall
of manpower of about 30% with a potential to generate a
number of jobs for the rural and urban poor3.

Workforce size of PSI is more than the combined strength

of the Army, Navy, Air force and Police put together. With
8.9 million security guards and 1.9 million police officers,
India has 05 times as many private security guards than
police officers. While the sanctioned strength of police
personnel (civil and armed) in 2016 was just 2,464,484 the
employment in the PSI far exceeds the number of police
personnel in the country. The following table shows data
derived from Forbes and Statista estimates, depicting the
ratio of personnel employed in private security to that in
police force in selected countries.

1http://www.skilldevelopment.gov.in/assets/images/annual%20report/Annual%20Report%202016-2017%20-%20English.pdf
2https://www.moneycontrol.com/news/business/data-story-india-has-the-worlds-largest-number-of-private-security-workers-industry-to-double-by-2020-2390933.html
3https://www.dayafterindia.com/2018/01/01/grant-para-police-status-private-security-sector/
 Report | Private Security Industry 03

INDUSTRY OVERVIEW

The results from the above table show that India whilst
topping the list, far exceeds other countries in terms of
the divide between personnel employed in PSI and police
KEY GROWTH DRIVERS
force. Clearly, there is a vast potential for the large
workforce in PSI to provide allied police services along
with the law enforcement agencies to fill up the current Increase in crime rate & terrorism
gap. However, it would require an appropriate policy 01
framework to enable PSAs to function as allied police
force in India. Some of the allied police services which are
globally outsourced to private security are:
▪ Security of the outer periphery of prisons and 02 Rising urbanisation spike in demand
transportation of prisoners of tier-I & tier-II cities
▪ Senior citizen preventive security services
▪ Street surveillance and video control room
Low police to people ratio of
management 03 150:100,000
▪ Assist police in handling emergencies and disasters
▪ Background verification of employment applicants
▪ Security management for events and festivals
▪ First-level response to home security alarm activations Penetration of organised players.
04 foreign players through FDI
▪ Delivery of summons; chip-based tracking of prisoners
on parole

Identification of different job roles under the PSARA, Exponential rise in the number of
streamlining of recognition of prior learning, empowering 05
banks and expanding atm network
of service providers to be a part of the training effort
under PSARA administered by States and ensuring quality
of trainers, assessors and the training being imparted
through NSDC will further boost the growth of the industry Growth in security solutions
by giving an identified progress path to the candidates
06
seeking to make a career in this industry. With the highest
growth being in the security industry compared to any
other industry, GoI schemes to boost the skilling effort by
way of provisioning of subsidies through schemes like Institutional and organisational
07 change
PMKVY should be introduced.

Government initiative likes smart

08 cities & make in India

09 Increased concern for personal safety

10 Potential for increase security

advisory services & low cost services
 Report | Private Security Industry 04

INDUSTRY STRUCTURE

The Private security industry can be broadly divided into 2 Allied Services
major segments, the security services industry and allied The Allied services segment alludes to security services
services. related to providing of security services and consists of Event
security Management and Security guard training
Security Service Industry
A major part of the security services industry is the ▪ Event Security Management
manned guarding followed by cash and electronic Event Security service providers employ unique command
security. Manned guarding accounts for nearly 75% of the and control methodology enabling the client to focus on
security service industry followed by cash services their event without worrying about security. Major
management and electronic security services having activities under event security management are crowd
nearly 20-25% share. control and VIP protection services. These services aid in
security and emergency management planning also.
▪ Manned Guarding
A major part of the security services industry is the ▪ Security guard training Services
manned guarding where they have the highest The introduction of the Private Security Agencies
employment rate and the highest revenue share in the (Regulation) Act, 2005 has led private security agencies to
PSI. Keys users of manned guarding services are adopt in-house training practices which are certified
IT/ITES, retail, commercial, and manufacturing under PSARA by respective states. States have authorised
wherein 41% of the manned guarding services are the opening of training institutes recognised by them
utilised in the commercial sector and 39% in the under PSARA. Sector skill council which is the authority
residential sector4. Further, 70% of the residential on NOS/ QPs related to the subject, also has a number of
sector demand is coming from major cities like New training partners (TPs), who undertake the training,
Delhi, Chennai, Bangalore, Pune, Chandigarh, however the trainees need to be certified by a PSARA
Lucknow, Ahmedabad and Jaipur. certified training agency to be employed as a security
guard. The training sector, due to PSARA not recognizing
▪ Cash Management Services the training conducted by private TPs affiliated to sector
This is predominantly organised, with 7-8 players skill council, is unorganised and fragmented.
controlling 75-80% of the market share owing to high
level of security concerns associated with operations in
this area. The market is not yet mature for this
segment as there are issues with licensing of arms,
transfer of liability and insurance, making this segment
a high risk and low return business. However, there has
been an increase in demand for cash management
services in view of: -
– Expanding bank branch network.
– Increase in number and spread of ATM across the
country.
– Growing use of debit cards.

The cash management services offered by PSI are:

– Cash replenishment services for ATM network of
banks
– Movement of cash and high value items within
bank’s branch network.
– Cash pick-up and delivery for large corporate
houses, retail outlets etc.

4http://www.nsda.gov.in/skill%20gap%20report/sector%20skill%20gap%20report/Private_Security_Services.pdf
SKILL DEVELOPMENT
AND JOB CREATION
 Report | Private Security Industry 06

INDUSTRY SIZE AND EMPLOYMENT POTENTIAL

Globally, and in India, manned guarding forms a major

part of the private security service industry, constituting
almost 75% of the private security services industry. In
India, the private security industry is one of the largest
employment generating industry; it currently employs
nearly 8.9 million people and as per a conservative
estimate has the potential to employ 3.1 million more by
2022.

The 8.9 million private security guards and supervisors are

employed in more than 22,000 Private Security Agencies
(PSAs) in India, mostly managed and run by Ex-Servicemen
as their resettlement projects.

Work force is largely sourced from Northern, Central and

Eastern parts of India, with states like Bihar, Uttar
Pradesh, Madhya Pradesh, Rajasthan and Assam
contributing the maximum. Regions with significant
population of ex-servicemen, paramilitary personnel and
unemployed youth are biggest contributors.

Security guards constitute 90% of the private security

industry workforce; they form the base of the pyramid
with little or no relevant experience. The private security
services industry is mainly unorganised and only 10%
Primary source of workforce
workforce is employed in the organised sector. With the
anticipated growth potential of industry, the employment
potential is evident. Further, considering that majority of
the workforce is being employed in the unorganised Source:http://www.nsda.gov.in/skill%20gap%20report/sector%20skill%20gap%20repor
sector, skilling potential is also evident. t/Private_Security_Services.pdf

HUMAN RESOURCE TREND - PSI

12
8.32 8.9
7 7.41

2012 2014 2016 2017 2022

Human Resource employed (in million)

Source: http://www.skilldevelopment.gov.in/assets/images/annual%20report/Annual%20Report%202016-2017%20-%20English.pdf
 Report | Private Security Industry 07

SKILLING LANDSCAPE

National Skill Development Corporation (NSDC) The training curricula and skills assessment frameworks were
An industry with such a large size and employment defined by the sector skills council under the aegis of the
potential, requires appropriate skilling to ensure job National Skill Development Corporation (NSDC) and
creation as well as presence of appropriately skilled accordingly, Qualification Packs (QPs)/National Occupation
manpower. The Security Sector Skills Development Council Standards (NOS) were developed for the above-mentioned
(SSSDC) under NSDC, till Jan 2018 before it got subsumed job roles. The NOS provides scope of the job roles in addition
into Management Sector Skills Council, identified the to prescribing the performance criteria, technical/domain
following 8 job roles for the sector: knowledge required for the specific job role as well as
core/generic and professional skills for carrying out the
▪ Unarmed Security Guard activities. Sector skills council also provided programs for
▪ Armed security guard training of trainers as well as training of assessors and had
▪ Security Supervisor formulated a protocol on accreditation of assessment bodies
and certification of trainees and trainers for PSI on a pan-
▪ CCTV supervisor
India basis. While the NOS describes the skilling
▪ Security Officer requirements, there are no prescribed training standards or
▪ Personal security officer procedures provided by the sector skills council for each of
▪ Assignment Manager the 8 identified job roles listed above. Basis the inputs
▪ Investigator received from Industry sources, the employers see the
following skill gaps in the current workforce: -

Job roles Skill Gaps5

Guards need more rigorous training on fitness, firefighting, english communication

Unarmed security guard
skills

Guards need more rigorous training on fitness, firefighting, english communication

CCTV supervisor
skills

Team management skills, medium-term vision and resource planning are key issues
Security supervisor
faced by the industry currently

Armed security guard Proficiency in handling of firearms; awareness levels about safety in handling

Personal security officer Proficiency in local languages of regions where the security guards are employed

“
5NSDC report HR and skill requirements in private security services
http://www.nsda.gov.in/skill%20gap%20report/sector%20skill%20gap%20report/Private_Security_Services.pdf

Many customers increasingly prefer personnel with good soft skills (English
communication, presentability, etiquette) and this is a gap in the candidates
which has to be addressed both at the time of entry and through relevant

”
training
- A leading PSA
 Report | Private Security Industry 08

SKILLING LANDSCAPE

Training guidelines prescribed under the Private Security Recognition of Prior learning (RPL) scheme was first launched
Agencies Regulation Act, 2005 (PSARA) as a component under the Pradhan Mantri Kaushal Vikas
Under the Private Security Agencies Regulation Act, 2005 Yojana (PMKVY) 2015-16 with a budget of INR 1,500 crore to
(PSARA), the trainees have to undergo training and be train 24 lakh people, including 14 lakh fresh trainees and
certified by Training Partners (TPs), recognised by the skilling of the remaining under the RPL program. Following
States (under the PSARA), and the security service the first phase of the scheme and its review, the PMKVY 2.0
providers are required to employ only the manpower so was launched with a budget of INR 12,000 crore to skill 10
certified. Further, PSARA does not specify any standard million youth by 2020 of these 60 lakh were to be provided
guidelines required for training other than broadly stating fresh training and 40 lakh were to be certified for the RPL
the requirement and the need to conduct a 160 hrs program. Currently, RPL has certified about 4.8 lakh people
training. In addition, PSARA does not specify any covering 458 districts across India till date6, the candidates
categories of security services other than provision of have been enrolled, assessed and certified in 185 job roles
security using unarmed security guards, whereas in across 30 sectors.
contrast, sector skills council under NSDC has specified 8
different job roles as required and being employed by the In addition, the industry feels that the level of understanding

“
industry. of trainees is lower as well as recognises the need for
refresher training on regular basis. However, since guards are
The key challenges in training standards are reluctant to bear the cost of training, the same has to be
around lack of uniformity and minimum borne by the service provider which proves to be a
substantial increase in cost. This coupled with the high
standards in training across security companies.
attrition rate also impacts the management’s capability for
Many firms do an ad-hoc job of training, many having training sessions. Another issue which compounds the
times not fulfilling the bare minimum set by conduct of refresher training on a regular basis is the
PSARA. Even in cases where the quality in inability to relieve the guards from their place of duty for
undertaking the same.
terms of number of hours are met, the quality

” “
of trainers, instruction material is not relevant
and outdated As the security industry is evolving fast with
– An industry expert technology playing a larger role in security
solutions – the security personnel also need to
become comfortable with the various types of
Recognition of Prior Learning (RPL) and Refresher Training
The existence of the security industry (and other
technology solutions and their usage, monitoring,
industries) pre-dates the initiative to conduct skilling and tracking, reporting etc. To this end, the training
training in an organised manner. Thus, there exists a large content has to be made more relevant to the

”
tranche of manpower which has been trained over a needs of the moment, as well as regular
period of time and has learnt to carry out their trade
while on job. For a system to suddenly shift to a refresher training needs to be conducted.
certification-based acceptability of training acumen, it is – A leading PSA
but necessary for the existing trained manpower to be
certified and to this effect Recognition of Prior learning
(RPL) was launched. The RPL looks at assessing the
existing trained manpower on decided parameters and
conforming certificates on them, thus bringing them to
the mainstream of certified skilled force.

6Data as reported in Skilling Database Management System (SDMS) as on March 14, 2018
http://www.nationalskillsnetwork.in/rpl-under-pmkvy/
 Report | Private Security Industry 09

SKILL DEVELOPMENT AND JOB CREATION

WAY AHEAD

Impetus to Aid and Streamline Skilling TPs to ascertain the quality of training being imparted by the
The gaps in the skilling proficiency required by the registered TPs. To make use of existing infrastructure and
industry/ clients and the training requirements as meet the training requirement it is further possible to allow
identified under PSARA are evident and these need to be service providers having more than 1000 guards to establish
addressed to make the sector more viable and regulated. in house training institutes. Standard Operating Procedures
Despite the 25 % growth in the sector and the massive (SOPs) should be framed for the job roles to bring
requirement of manpower, the industry reels under consistency in training processes akin to what MHA is
ambiguity of admissible training certificates as well as currently reported to be working on in developing - SOP
requirement of different categories of trained manpower. guidelines for the PSAs engaged in cash handling and
There is an incremental human resource requirement of transportation.
3.1 million for the period 2017-20227 . Off late the GoI
impetus on skilling of unarmed security guards has
declined as no fresh allocation of training numbers has
been provided by the GoI for conduct of training and
provision of subsidy to the trainees for undertaking the
training. The GoI needs to increase the support to the
industry to boost the availability of trained manpower.
Also, amendments to the PSARA to identify more
categories of security services inclusive of armed security
guards, as well as streamlining of methodology of
certification of training being provided will go a long way
in reducing the gap in skilling required for job roles
needed by the industry to meet the customer
requirement. Further, the formalisation of methodology
(acceptance of training carried out by private TPs
affiliated to NSDC and not recognized under PSARA) will
go a long way in standardising the norms and
identification/ acceptance of training certification on a
pan India level and make the process more amenable to
the industry.

Maintaining of Quality of Training Imparted

The curriculum, standards of training required to be met
as well as the infrastructure standards to be maintained
by a training center, certification of trainers as well as
assessors may be regulated by the NSDC through sector
skills council. The training may be conducted by TPs
identified and recognised by states under PSARA. The
states may institute an annual certification of the TPs
with the certification team comprising of members from
sector skills council/ NSDC. NSDC/ Sector skills council
may also be mandated to undertake surprise checks of

7http://www.skilldevelopment.gov.in/assets/images/annual%20report/Annual%20Report%202016-2017%20-%20English.pdf
 Report | Private Security Industry 10

SKILL DEVELOPMENT AND JOB CREATION

WAY AHEAD

Boost to Recognition of Prior Learning (RPL)

The dismal state of recognition of prior learning carried
out to date is evident from the figures mentioned earlier.
RPL needs to be implemented with greater vigour so as to
bring the available skilled manpower into the mainstream.
Allowing service providers, employing more than 1000
guards, to establish training institutes and empowering
them to undertake RPL will ensure faster assimilation of
the skilled ‘uncertified’ manpower into the mainstream. It
will also provide hope to the existing manpower of
employability pan India and stop misutilisation of
manpower, if any. It will also enable the unorganised
sector to come into the fold of the organised sector.

International Certification
The employed numbers in PSI are large, further the
employable population of India is set to rise with India
becoming the youngest country, having the maximum
number of its citizens with an average age of 29 by 2020.
Compared to this, world over, countries are facing
shortage of manpower. If we were to align our curriculum
and training to international standards and requirement as
well as provide international certification, duly recognised
in targeted countries (for employment), we will be able to
provide for job creation which is an essential requirement
of the country.
POLICY ISSUES CONCERNING
PRIVATE SECURITY INDUSTRY
 Report | Private Security Industry 12

POLICY ISSUES CONCERNING PRIVATE

SECURITY INDUSTRY

The private security industry in India is governed by

various regulations, the most relevant being the Private
Security Agencies Regulation Act (PSARA), 2005 formulated
by the Ministry of Home Affairs (MHA), GoI. The Act
regulates the eligibility criteria for operating a security
agency as well as prescribes training requirements for
“
“PSARA has been a much-needed regulation to
ensure that the minimum quality standards are
met; though for a PSA which intends to provide
services in different states it is required to make
a fresh application in each state. Even the
security guards. Additionally, PSARA also prescribes various
compliance requirements for the security agencies eg:
application and process is different from state to
verification of employees, affidavit for compliance with state. Getting the license also takes a lot of
FDI policy where applicable, maintaining statutory time, though some states have been moving

”
registers, commencement of activities etc. Apart from the quickly in giving approvals.”
PSARA some other (indicative) regulations applicable to PSI
are: - A leading PSA
▪ Arms Act, 1959
▪ FDI Policy Mandatory Police Verification
▪ Minimum Wages Act (1948) Requirement of mandatory police verification for directors of
▪ Provident Fund Act (1952) the company and processing time for such applications differ
▪ Employee State Insurance Act (1948) for most states. Moreover the conduct of police verification
▪ Payment of Bonus Act (1965) of each security guard is also mandatorily to be conducted by
▪ Payment of Gratuity Act (1972) the security agency hiring them. The processes involved are
The current scenario in terms of policy and regulations tedious and timely rendition of police verification invariably
affecting the PSI are discussed below. seldom happens, which puts the PSAs in a quandary as regard
employment/ deploying of guards.
Overlapping Federal and State regulations Recently, the MHA issued advisory8 to all states/UTs and
The major concern for the security industry from policy advised them to utilize Crime and Criminal Tracking Network
perspective is that it is subject to an overlapping set of and Systems (CCTNS) database for conducting verification of
federal and state regulations, leading to multiplicity of antecedents for the purpose of issue/renewal of licenses to
registrations to conduct business. The PSARA has given the PSAs. This is a welcome move and if diligently followed by
discretion to each State to formulate their rules for States/UTs it will help in expediting the application process
implementing the Act. PSARA was brought into effect from and overcoming delays.
15th March 2006. Due to separate rules in each state,
there is a disparity in the processes for grant of licenses Changes in FDI limit
etc, despite the details required to be captured majorly In 2016, the Department of Industrial Policy and Promotion
remaining the same. (DIPP) allowed for 49% FDI via the automatic route and up to
74% via the approval route for PSAs in India. However, the
This heterogeneous system acts as a barrier for PSAs in changes in FDI Policy were not followed by suitable
providing integrated professional services on a pan-India amendments in the PSARA. As per the relevant provisions of
basis. Distinct enforcement often leads to disruption of PSARA, an Indian should be holding a majority stake in the
services to clients, impacting the overall growth potential company, which directly contradicts the revised FDI
of the industry. The prevailing regulatory issues in the guidelines permitting upto 74% FDI under approval route for
sector adversely stunts the ability of the industry to PSAs. Therefore, it is necessary to align the PSARA with the
organise itself in a professional manner and raise service- extant provisions of the FDI Policy.
delivery as well as compliance standards. Therefore, it is
critical that a single window licensing system is created as Challenges pertaining to the Arms Act, 1959
a combination of central/state level registration, The PSARA does not contemplate provision of armed security
depending on factors such as the size, scale/area of as a service. In addition, the current framework of the Indian
operations, employment conditions/terms, past Arms Act, 1959 only allows individual applicants to hold arms
experience and the like for the PSA. licenses. As a result, private security agencies have been
technically compelled to employ people who hold Arms

8https://mha.gov.in/sites/default/files/PM_06072018.pdf
 Report | Private Security Industry 13

POLICY ISSUES CONCERNING PRIVATE

SECURITY INDUSTRY

License in individual capacity. The firearms issued to From a practical view point, the disparity in wages leads to
individuals also have restrictions in terms of territories in issues relating to shortage of supply of manpower in states
which they can be used. This severely curtails the ability with lesser rates. As an example, a worker in skilled category
to pool armed guards in an efficient manner to service in Delhi may not be willing to take up employment in the
clients and can be particularly difficult in case of inter- NCR region say Gurugram where prevalent Haryana rates
state transfer of goods/personnel. The central government differ substantially vis-à-vis the rates prescribed for Delhi. To
has provided some exemptions to certain clauses of the add to it some states are yet to establish security guards as
Arms Act to enable companies, banks, industrial or other skilled labourers. These states continue to consider security
establishments to obtain licenses in the name of legal guards as semi-skilled or unskilled labourers, further creating
entity rather than obtaining it in the name of individuals. disparity in the file and rank of manpower employed in the
Thus, there is a need for an amendment in this regard sector. In addition, this creates a situations of exploitation
facilitating the ease of use of armed guards by the security and a feeling of helplessness and incredulity in the
service providers. employees (security guards).

“
Recategorisation of Private security workers as Customer speak
Skilled/Highly skilled Upskilling has improved the take home pay of
In January 2017, vide a Gazette Notification, workers in
security staff thus getting better quality persons.
the private security have been recategorised under the
Minimum Wages Act, along with modification in the daily It has also increased the cost for us, however, our
management is ready for the same in order to get

”
pay. Security guards without arms have been recategorised
as “skilled” and security guards with arms and security better quality services
supervisors have been recategorised as “highly skilled”.

The Central government has also revised the minimum Bridging the gap
wage payable to employees of the “Watch and Ward” ▪ To provide a single window system to streamline the
sector to Rs.673 with Rs.637 as the basic wage and Rs.36 registration process, an amendment to the PSARA may be
as Variable Dearness allowance (VDA) per day for areas considered for specifying the categories of PSAs that can
under category ”Area A” as listed in the notification, Rs provide services throughout India based on Central
612 per day (Rs 573 as basic wage + 33 VDA) for areas Registration and other PSAs that need to obtain state-
under category “Area B” and Rs 522 per day (Rs 494 basic level registration. The actual enforcement of the Act can
wage + Rs 28 VDA) for areas under category “Area C” 9. also be segregated between central/state-level
authorities accordingly. This would not only reduce
While the rates prescribed by Centre are mentioned above, enforcement time but also allow national level
each State, vide Labour Department notifications, issues integration to effectively monitor and plan for the private
its own minimum wage rates. The table below is an security industry.
illustrative example of current minimum wages per month ▪ PSARA has an inclusive definition of “private security” i.e.
prescribed by some States for the period of April 2018: the business of providing private security services
including armored car service, private security guards,
Category Delhi10 UP11 Haryana12 etc. Similarly, ‘Private security agency’ (PSA) is defined
as a person or body of persons other than a government
Un-skilled 13,896/- 7613.42 8297.56 agency, department or organisation engaged in the
business of providing private security services, including
Semi-Skilled 15,296/- 8374.77 9368.54
training to private security guards or their supervisor or
Skilled 16,858/- 9381.06 10328.83 providing private security guards to any industrial or
business undertaking or a company or any other person or
Highly skilled - - 10845.27 property. The scope of “private security” under PSARA is
10http://www.capsi.in/notifications/Current%20Minimum%20wages%20Delhi%20w.e.f.%20April%202018.pdf
broad and does not prescribe an objective test to
11 https://www.labourlawreporter.com/wp-content/uploads/2017/05/UP-MW-revised-w.e.f.-01-04-18-to-30-
09-18.pdf
12 https://www.labourlawreporter.com/wp-content/uploads/2018/05/Haryana-Minimum-Wages-1-1-18.pdf
determine the activities that are sought to be regulated.

9https://clc.gov.in/clc/node/572- VDA minimum wages order dated 3/4/2018

 Report | Private Security Industry 14

POLICY ISSUES CONCERNING PRIVATE

SECURITY INDUSTRY

There is no clarity on whether PSARA applies to specific be accepted by other states as there are no restrictions in
activities, which has resulted in ambiguity as to what PSARA for the same. States should be given suitable
constitutes “private security”. With the provision of direction to implement the same.
private security becoming increasingly mechanised ▪ Regulatory impediments, especially lack of clarity and
owing to constant innovation in technology, it has ambiguities in the laws and regulations relating to FDI
become an urgent need to amend the PSARA to bring into India makes attempts at liberalisation counter-
clarity to the industry, with the inclusion as regard use productive. In its bid to attract more foreign investment
of armed security guards and other security related and enhance the ease of doing business in India,
services offered. legislative action in removing ambiguities in the
▪ Each state has its own rules for the grant of license and regulatory framework is imperative. It will be beneficial
mandatory conditions for the same. One of the if the various governmental agencies coordinate between
conditions is the verification of antecedents of the themselves effectively to ensure simultaneous
applicants. On receipt of such request for verification amendments in legislations prior to liberalisations being
in prescribed form (as per state rules), the Controlling rolled out. Such initiatives will ensure effective
Authority of the State forwards it to the Deputy implementation of policies and contribute towards
Commissioner of Police of the concerned police district making ‘ease of doing business’ in India a reality. It is
where the agency intends to commence its activities proposed that a suitable amendment be made in the Arms
and for verification of particulars of the applicant Act so as to allow the licensed PSAs to procure and store
which is time consuming. To ease the same, the states arms subject to prescribed compliance and audit
may consider implementation of an online process requirements.
which would make the verification faster, easier and ▪ The states should also frame regulations for mandating
more accountable. Crime and Criminal Tracking employers to pay minimum wages to the personnel. For
Network and Systems (CCTNS) could be used for example, the Department of Law, Justice and Legislative
implementation of the same as per the advisory issued Affairs of the Delhi government has issued a notification,
to all states/UTs by the MHA. making it mandatory for employers to pay remuneration
▪ Online process for the conduct of police verification either electronically or through cheques, except in some
should also be incorporated for security guards. special circumstances. The President gave assent to Delhi
Moreover the police verification should be made time government’s proposed amendment under Minimum
bound, such that post a certain given number of days, Wages Act under which employers violating labour rules in
after rendering of application for conduct of police the city will face fine ranging from INR 20,000-50,000 and
verification, in case of no receipt of reply from the jail term between 1 to 3 years. Similar notifications with
authorities, police verification should be considered as penalties may also be enforced in other states. It would,
being completed and accorded. This would make the thus, take will and intention on the part of employers and
system more streamlined and remove ambiguity from the legislators to strengthen the legislation and to ensure
the process and save time. With the Crime and Criminal that the standards for minimum wages are adhered to in
Tracking Network and Systems (CCTNS) this would be salaries of private security guards and a step in that
easily implementable also. direction would be to align the minimum wages to the

“
tier of cities rather than leave it for states to decide for
the whole state. Further the Central Government needs
“PSARA must be a uniform implementation, its to impress upon states to standardise the categorisation
hampering the delivery and payments. PSI is the of security guards as skilled workers.

”
biggest affected body due to lack of uniform ▪ Recently, MHA has created a new division to address
issues related to security of women comprehensively. On
implementation.” the same lines, it is recommended that MHA should also
- A leading PSA create a separate division relating to private security so
as to help administer the issue related to the industry in a
▪ The issue regarding trained personnel being employed faster manner. Further, uniformity in the ranks/ stature
in other states has been impacting the employment of of the all the State controlling authorities across India, as
personnel inter State. In this regard, MHA vide against the existing different levels of offices dealing with
clarification dated January 11, 201813 clarified that the PSARA, would also go a long way in streamlining the
certificates issued to trained guards in one state should associated processes across the country.

13https://psara.gov.in/PDFs/PrivateAct2005_16012018.pdf
GOODS AND SERVICES TAX (GST)
AND ITS IMPACT ON PSI
 Report | Private Security Industry 16

GOODS AND SERVICES TAX (GST) AND ITS

IMPACT ON PSI

PSI – Issues in GST compliances and current challenges In addition, security services provided by PSAs are subject to
faced by industry a high GST rate of 18% which further adds to the GST woes of
GST was introduced in India w.e.f July 1, 2017. As a this industry. These issues are also leading to delay in wages
reformatory measure, it eliminates multiple taxes (levied to the work force who primarily hail from weaker sections of
by the Centre and States) and enables businesses to avail the society. Therefore, initiatives which were earlier taken
credit of tax paid on procurements which were hitherto a by the industry for skilling and employment of workers
cost. However, transition to the GST regime has led to belonging to the weaker strata is thwarted in the struggle of
several challenges for PSI and other industries too. keep businesses afloat.
Challenges being faced by PSI and way forward are Industry associations have also expressed concern that GST at
enumerated in the succeeding paragraphs. the rate of 18% would force many agencies to close business
and lead to loss of employment for workers14. Recent reports
Shifting of tax liability of closure of a business by a Kolkata based security agency
In the pre-GST regime, PSAs were liable to pay Service Tax leading to loss of job for its guards, in a leading newspaper,
at the rate of 15% on provision of security services to is an example of the wave of job losses that seems nearer by
business entities. As an exception, onus of tax payment the day15.
was on the service recipient in cases of provision of
security service by a proprietary firm (or individual / HUF). Incorrect tax base
However, on GST implementation, liability to pay GST at In the Service Tax era, PSAs were required to deposit tax on
the rate of 18% has been fastened on the service provider their gross income which included service fee, wages to
without any exception. This has therefore led to a huge workers and contributions made to PF, ESI etc for these
compliance cost for service providers (belonging to the workers. This was contested by PSAs on the ground that
unorganised sector) who were earlier not liable to pay tax. wages and similar contributions to work force is paid on
behalf of the customers and tax should only be levied on the
Cash flow issues service fee received by PSAs.

“
In the pre-GST regime, trigger for tax liability for security
services (rendered by proprietary firms) was linked to “The security industry does not receive
payments by the service recipients. As a practice, PSAs substantial input tax credits, given the fact that
would raise invoice for the work force employed in the
almost 90% of the cost is towards salary of
preceding months only after they received payments from
the customers without any cash concerns of discharging guards. Due to increase in tax rate to 18%,

”
tax liability. working capital requirement has correspondingly
On transition to the GST era, PSAs are faced with the increased by almost 2-3%.”
challenge of upfront tax payment on a forward charge
- A leading PSA
basis. This has created a setback for PSAs as their
customers typically takes 3 to 6 months to pay them after
issue of invoice. Therefore, PSAs are facing key challenge

“
of managing additional funding to meet tax obligations.

“GST has led to a short-term impact on the

working capital requirements as customers are

”
delaying payments because of their refunds
being stuck with the authorities.”
- A leading PSA

14https://www.thehindu.com/business/Economy/private-security-agencies-seek-gst-on-commission-not-gross-income/article24421383.ece
15https://timesofindia.indiatimes.com/city/kolkata/kolkata-private-security-business-reels-under-gst-burden/articleshow/62878333.cms
 Report | Private Security Industry 17

GOODS AND SERVICES TAX (GST) AND ITS

IMPACT ON PSI

It was expected that the anomaly of an incorrect tax base Tax base to be limited to service fee of the PSAs
would be addressed on transition to GST. However, this It is proposed that wages and statutory contribution made to
anomaly has continued in the GST regime as well. This workers on behalf of customers be excluded from the tax
adds to the cash flow worries of PSAs, as wages, PF, ESI base for levy of GST. Therefore, the tax base for the
etc are effectively incurred by these agencies on behalf of payment of GST should be the gross amount received from
the customers. Split of the revenue received from the the customers less amount paid towards salaries and related
customers indicates that work force related costs comprise contributions.

“
around 85-90% while the balance forms the service fee of
PSAs. This further adds to the question of sustainability of
these businesses as levy of 18% GST on the gross amount Customer speak
recovered from the customers is a hurdle that players from GST should be charged on the service charge

”
the unorganised sector may not be able to overcome. of the agency and not the total wages

“
“GST is expected to positively contribute to
economic activity and fiscal sustainability by
reducing the cost of complying with multiple
state tax systems and expanding the tax base
by bringing more informal activity into the
In this regard, it is relevant to note that similar dispensation
has been granted in many economies to ensure sustainability
of such manpower driven businesses. This is based on the
rationale that the salaries of the security guards are being
paid for by the principals or clients of the PSAs and the

”
security agencies have no control or flexibility regarding the
formal sector” portion of payment which is earmarked as wages or related
- A Leading PSA contributions for the workers16. Reference in this regard can
be made to the clarification issued by the Ministry of Finance
and the State Administration of Taxation of the People’s
Way Forward Republic of China where it was clarified that taxpayers
The issues highlighted underline the fact that the concerns engaged in security services would have to pay VAT at
of this industry require prompt redressal. Given the applicable rates on the difference between the gross amount
contribution of PSI to employment generation and skills received and the amounts paid on salaries and social security
initiative coupled with adept support to the Government contributions17.
machinery in providing security to the citizenry, it is Therefore, levy of GST on the service fee of PSA would
imperative that a beneficial treatment be accorded to this positively address the cash flow concerns of this sector and
industry under the GST regime. In this regard, the would also encourage compliance18.
following solutions may be considered for addressing the
GST concerns of PSAs: Reduction in rate of GST from 18% to 5%
At present, GST rate of 18% charged by PSAs on an enhanced
Shifting of tax liability from forward charge to reverse tax base has led many customers to re-evaluate their
charge basis manpower requirement. This further impacts the
It is proposed that the onus of tax burden be shifted from sustainability of businesses where supply of manned guard
PSAs to the customers. This would ensure that PSAs would services is the primary source of revenue.
not have to deal with sustainability issues in the wake of The proposed reduction in tax rate would ensure that
GST. PSAs would therefore be geared to meet the security concerns of job assurance of the work force is dispensed
demands of the country and invest in focus areas such as with.
skilling and capability enhancement.

16Revenue Memorandum Circular No. 39-2007 issued by the Commissioner of Internal Revenue Phillipines
17Cai Shui [2016] No. 68 dated June 18, 2016
18https://www.thehindu.com/business/Economy/private-security-agencies-seek-gst-on-commission-not-gross-income/article24421383.ece
 Report | Private Security Industry 18

GOODS AND SERVICES TAX (GST) AND ITS

IMPACT ON PSI

Additional recommendations Conclusion

▪ In addition to resolution of the challenges highlighted GST implementation is understood to be a major indirect
above, it is imperative that products which aid tax reform, which would provide the much-needed fillip to
effective surveillance measures such as CCTV cameras, the economic development of the country. Therefore, it is
sirens, indicator panels, burglar or fire alarms, two - important to work towards achieving the desired objective
way radio are kept in the concessional tax rate slab as and remove any unintended obstacles from the path. It is
against high tax rate slab of 18%. expected that the GST troubles of PSI will be addressed
This is important as it would ensure that PSAs are not shortly considering the mentioned cogent reasons and the
pressured due to high cost of procurement of such significant growth potential of this industry.
items. Further, benefit of reduced tax rate for goods
involved in the provision of security services is also
available in other jurisdictions. For example, supply
and installation of security/alarm systems as fixtures in
buildings is eligible for a reduced VAT rate in Ireland19.
Therefore, it is proposed that benefit of concessional
rate of GST be accorded to goods / products which are
critical for provision of effective security services.
Similar dispensation i.e exemption from Customs duty
on import of such security products would go a long
way in incentivizing this sector.
▪ At present, credit of GST paid on motor vehicles is not
available to businesses except when used for further
supply, transportation of goods or passengers etc. In
such a case, GST credit availed on motor vehicles
procured by PSAs for provision of cash logistics services
may be disputed by the tax authorities. Given that
secure transportation of cash is one of the key private
security demands of banks, GST paid on procurement of
motor vehicles for transportation of money for banks /
financial institutions should be made available to PSAs.
Availability of GST credit on motor vehicle for
transportation of money is also one of the key
proposals for amendment of GST laws which has been
approved by the GST council in its meeting on July 21,
2018. Amendments reflecting such change is presently
awaited. It is expected that the other tax concerns of
this sector would also be shortly addressed.

19https://www.revenue.ie/en/vat/vat-rates/search-vat-rates/S/security-services-supply-of-.aspx
SHIFT FROM
UNORGANISED TO
ORGANISED SECTOR
 Report | Private Security Industry 20

SHIFT FROM UNORGANISED TO ORGANISED

SECTOR

The Private Security Sector is the second largest employer Factors contributing in the shift to the organised sector
of manpower after the Agriculture Sector and lies The increase in the proportion of the organised market can
predominantly in the unorganised sector of our economy. be attributed to various factors:
Industry consultations have suggested that the supply of ▪ Impact of GST – The new tax regime has led to a shift
manpower is likely to grow at a CAGR of about 10% over from unorganised to organised sector supported with the
the next decade. Thus, approximately 70 lakh to 100 lakh move from manual to digital technologies. GST takes
individuals are added to the pool every year of which only away current unfair advantage enjoyed by the
20% is estimated to be added through organised supply unorganised sector by bringing them to folds of the
(compliant with PSARA training requirements and those organised sector. In effect GST has been a positive step
who are likely to stay for more than 01 year). In 2014, only and has given a level playing field to the industry players
35% of industry was organised which is expected to reach a and brought the unorganised sector at par with the
level of approximately 50% in 2020. On the other hand, organised sector. Thus, unorganised entities have been
cash and electronic security which constitute 20-25% of forced to make efforts to transform their business models
the private security industry is mainly organised with the into legitimate and compliant entities competing for
top 7-8 industry players controlling 75-80% of the market, consumers with the organised entities.
as has been intimated before. Despite a large majority of
the business being unorganised there is a shift towards the
sector becoming more organised and compliant.

“
GST is also one more step in the path to formalisation of the industry as smaller, non-complaint firms
that used to quote bundled prices to clients and not depositing service tax to authorities would lose

”
the advantage they used to get due to their non-compliance. Customers will force them to comply
with GST so as to not lose input credit.
- An industry expert

UNORGANISED vs. ORGANISED SECTOR SHIFT TO ORGANISED SECTOR IN RECENT YEARS

10%

40%

60%

90%

Unorganised Organised Unorganised Organised

FICCI-Grant Thorton report on Private security services in India 2015

 Report | Private Security Industry 21

SHIFT FROM UNORGANISED TO ORGANISED

SECTOR

▪ Re-categorisation of workers in the sector has paved Need for empowered regulatory body
way for better framework of regulations (minimum The shift from an unorganised sector to an organised sector
wages, PF norms, gratuity, insurance etc.), better has been evident since the introduction of the PSARA in
training standards which can be provided by organised 2005. Since then the shift has become further pronounced by
players to their employees. However, this needs to be the standardisation of training curriculum with the
implemented across states for it to have its desired introduction of NOS/ QPs for conduct of security related
effect. training and also the introduction of GST. An empowered
▪ PSARA compliances - Post introduction of the PSARA, regulatory body will go a long way in making the sector more
the companies are required to obtain and hold a license organised and conducive for growth and most importantly
for operating in the sector. In addition, the PSARA will bring quality to the fore. As on date companies facing
prescribes training requirements and has brought in issues do not have a medium to resolve the same apart from
organised players which has led to more private recourse to legal authorities. Thus, issues like outstanding
agencies adopting in-house training practices. By payments etc remain largely unresolved and are proving as
bringing about amendments to PSARA to address impediments in the faster growth of the sector.
training related issues concerning NSDC & TPs, the
category of security services, etc, will further enhance Keeping the above in mind, a centralised regulatory body
the effectiveness of PSARA. constituted and empowered to tackle issues such as non-
payment of dues, penalising defaulting companies etc. would

“
enable better functioning of the PSI.
PSARA has ensured that the security agencies
Policies to Help the Shift from Unorganised to Organised
conduct their training, operations with some ▪ Manpower
defined standards and this in turn is leading to The private security services industry is manpower
a weeding out of non-compliant, fly by night intensive and requires a considerable number of
personnel to sustain its growth and momentum.
operators who don’t meet these requirements. Availability of quality manpower is one of the key issues
Adherence to standards is critical for any plaguing the industry and is a major area of concern. For
industry to get a recognition and stature in the example, while manned guarding forms the largest part of
PSI, the employment rate is very low due to unwillingness

”
eyes of the regulators, investors and
of people to join the manned guarding services.
customers. – A big challenge in the PSI is the high attrition rate.
- A leading PSA Current attrition levels stand at 40% for untrained
guards and 15% for trained guard20. This is due to the
poor benefits and compensation packages, improper
▪ Global players entering India through own operations understanding of the operating environment, and lack
and buyouts has led to the expansion of the organised of development opportunities to allow employees to
segment. In this regard it is imperative that the PSARA grow. Policies to address the issues leading to high
is amended to be in line with the latest rules on FDI. attrition rate would further enhance the growth of the
sector and its image.
▪ Customer’s preferences have shifted to the organised – Training also plays crucial role in providing candidates
service providers due to benefits of value added with better career opportunities and a feeling of being
services, better trained personnel, use of advanced empowered. The traditional method of training
technologies and streamlined solutions. Most clients especially in the large informal sector is of concern as
look for technology-enabled security solutions which the same takes place in an unstructured way. Due to
organised players in the industry already offer, owing lack of formal training, such persons do not have a
to high capital and highly skilled manpower availability. formal certificate which acts as an impediment to

20http://www.nsda.gov.in/skill%20gap%20report/sector%20skill%20gap%20report/Private_Security_Services.pdf
 Report | Private Security Industry 22

SHIFT FROM UNORGANISED TO ORGANISED

SECTOR

earning better wages and better career

path. RPL, touched upon in Chapter 2, is a
way ahead to formalise the existing skills of
the manpower employed in the unorganised
sector to bring them to the fold of the
organised sector.
– Industry also faces a challenge due to
shortage of certified trainers and lack of
established training standards. Adoption of
international training standards through
NSDC and programs like Training-of-Trainers
(ToT) and Training-of-Assessors (ToA) would
help the industry in bridging such gaps. The
government may also create incentives for
the industry to adopt these training
practices.

Strict enforcement of regulations

Due to lacunae in the enforcement of the
regulatory framework, unorganised segment has
largely remained unchecked and players usually
skip adhering to mandatory compliance
requirements, which creates a detrimental impact
for all stakeholders including employees and
clients. Therefore, it is imperative for the
governments to ensure strict enforcement of the
regulations that will improve service delivery
quality levels as well as work environment for the
security personnel.

Ease of Doing Business

The government can play a big role in encouraging
the unorganised players to move into the organised
segment by facilitating the ease of doing business
in the industry. It can be achieved through reforms
such as single window clearance, reduction in
timelines for license grants and security clearances
and consonance in regulations across states.
MANTECH
Integration of Manpower and Technology
 Report | Private Security Industry 24

MANTECH
Integration of Manpower and Technology

With the growing use of technology in all sectors, PSI is no ▪ Manned Guarding
stranger to technological solutions that are giving a new – A visual deterrent against crime, trespassing, and
shape to private security services rendered by the vandalising.
companies today. One of the biggest markets in technology – Incidents reported by a human will tend to be genuine
segment is the surveillance market and it has tremendous and not false alarms.
growth prospects globally as well as in India. – An on-site response to utility faults.
– General inspection and management services.
Increasing terror threats, growing public and private – Real time surveying of CCTV footage, if applicable.
infrastructures and the increase in crime rates have – Alarm system surveillance.
resulted in the demand of the surveillance market in India. – Manned guards may hear a possible breach before CCTV
Video surveillance systems have been the largest product sees it.
category in India electronics security segment. The Indian
video surveillance market was reported to be around ▪ Technological solutions
US$1.58 billion in 2014 and is expected to reach to – Many alarm sensors can be fitted around a property to
US$8.24 billion by 2022, while growing at a CAGR of provide a number of ‘eyes’ all at once.
22.96%21. Market verticals that hold a significant share in – Alarms are attentive, they monitor 24/7.
the surveillance industry are transport, banking and – Substantial cost saving compared to manned guarding.
financial verticals and other commercial offices. – Visual and audible warnings can be used, if installed.
– Breaches can be captured on video in real time.
Subsequent paragraphs give an insight into how relevant Monitoring stations can determine if such a breach is
technological advancements are proposed to be leveraged genuine or false before taking further action.
for provision of security related services by the security
service providers.
On the flip side, manned guarding has substantial costs and
requires a high degree of trust for high value sites. Similarly,
Man Vs. Technology Solutions
technology solutions deployed on site have fair chances of
With the ever-changing technology and increasing reliance
raising false alarms and may not be suitable for all sites. It is
on technological solutions in every sector, there has been
thus, imperative that each site be reviewed properly to
a shift towards use of the latest technology in the private
select a balanced solution combining both manned guarding
security industry as well. Manned guarding companies are
and use of technology.
now realising that technology could improve service
delivery. They similarly recognise that investing in new

“
systems and platforms could give them the competitive
edge in an increasingly competitive and price-sensitive Customer speak
industry, where even the smallest efficiency savings could We have implemented an Online Visitor
translate into significant improvements in margins. Management system which registers visitor with
There are a lot of technologies available today that can
an OTP on their phone and a photo ID. Visitor is
monitor properties for intruders, secure and detect faults
such as water leaks and can provide the police with provided with a RFID badge through which the
evidence for prosecution. These include alarms (specially application tracks his/her movement. The
designed and adapted so that they run wirelessly) and application also tracks the count and location of
cameras (capture both day and night, high quality images
the visitors. As soon as a visitor is registered, an
which can be recorded and saved off site).
auto-generated email is sent to the concerned
person on whose confirmation only, is the visitor

”
allowed to move beyond reception.

21http://www.ncnonline.net/special-story/surveillance-market-in-india-increased-tremendously.html
 Report | Private Security Industry 25

MANTECH
Integration of Manpower and Technology

“
Integration with security technologies advancements As PSI is evolving fast with technology playing a
With high level of advancements in technology, services
larger role in security solutions, the security
like electronic security services, integrated facility
management and security architecture and engineering personnel also needs to become comfortable with
have seen greater prominence in recent times. Technology the various types of technology solutions and
integration helps in improving the quality of services their usage, monitoring, tracking, reporting etc.
offered by security companies. Additionally, the existing

”
large workforce also gets an opportunity to up-skill
To this end, the training content has to be made
themselves and progress to engaging employment more relevant to the needs of the moment.
conditions. - A PSI skilling expert
Technology integration has clearly benefitted the security
industry by improving service delivery. Some of the
advantages of this change are: - Technology trends
▪ Artificial Intelligence (AI)
▪ Paperless working: Historically, manned guarding firms
have had to wait for the paper trail to end before the Within the security market, robots that use AI are
emerging as a way for businesses to augment existing
true picture of their performance could be measured.
security patrols and provide greater situational
In the past, it could be months after an event before
awareness. Security robots can bring substantial benefits
the true impact of that event could be measured and a
to businesses:
response could be determined. Customer satisfaction,
– Patrolling of perimeter of corporate campuses or
which needs to be measured daily, could be harmed to
critical infrastructure sites to identify potential
the point of bringing a relationship to the point of
trouble/ issues;
collapse before the severity of the situation was
– Removes traditional guards from dangerous situations;
properly known. Systems and platforms enable
– Detects individuals or vehicles in unauthorised areas;
businesses to use the power of the internet to manage
– Integrates with existing sensors and systems to allow
the services they provide, dramatically improve operators to gain new levels of intelligence and insight
communications, maximise operational efficiency, and into situations.
add significant value to customer relationships. These
systems achieve this whilst also bringing significant ▪ Combining AI and robotics
22

advantages to individual employees. Security robots work by using multiple sensors to bring
▪ Transparent customer relationships: Customer the information together. Open-platform applications
satisfaction scores can be interrogated in real-time, work together seamlessly to collect and analyse data. AI
issues immediately identified, and remedial action software is embedded to provide security officials with
taken where required. The level of detail on the the ability to analyse the images captured by onboard
scoresheet can be granular; trends can be determined cameras.
to compare and contrast performance across an entire Advanced AI technologies have made it possible for robots
client portfolio. Dashboards can be created at the to be able to “learn” their surroundings. Robots are
touch of a button to see the performance of a initially programmed to navigate a particular route, but
particular site and of individual officers — all as they continue on this path numerous times, the robot
benchmarked against targets and key performance can make adjustments. AI makes this possible by giving
indicators. the robot the “brains” to engage with its surroundings and
▪ New technology does not just deliver advantages for adding significant value to patrols.
employers or their customers. Employees also benefit. AI also makes it possible to recognise patterns within
Their own portal enables them to manage their own large amounts of collected data. In the case of robotics,
time, pay, and performance. this can include automatically searching through video
surveillance feeds for anomalies. Security-based AI,
Security companies have evolved from servicing only however, is narrower in focus, executing certain defined
homes and businesses to servicing the government. This tasks such as object recognition or navigation. Advanced
not only enables entry of technocrats into the industry, object recognition enables a robot to become a core part
but also provides an opportunity for dispersal of technical of the enterprise security team. Leveraging this type of AI
knowledge and professional expertise in PSI. allows robots to identify when a human or vehicle is
approaching a perimeter and then execute a set of
procedures in line with an organisation’s goals.

22https://www.securityindustry.org/2017/09/01/robots-guards/
 Report | Private Security Industry 26

MANTECH
Integration of Manpower and Technology

▪ Internet of Things (IoT) security. Real-time viewing can also be used to help
Everyday objects that can send and receive data have improve employee driver safety and identify
started to enter our homes and this new development unauthorised or inappropriate use of company vehicles.
of the internet is what we call the ‘Internet of Things’. – Integrating CCTV with live Point of Sale transactions
Security companies use networks of various sensors to where a shop owner can check the specific transaction
measure and monitor the real world, react to it and time against the CCTV footage.
present the necessary information to security officers
for evaluation and action. Some of these sensors ▪ Drone surveillance
include - Motion sensors, Entry Sensors for doors and Surveillance is the close observation of a person, group of
windows, Glass Break sensors and Video Cameras. The people, behaviour, activities, infrastructure, building etc
majority of sensor technologies rely on detecting for the purpose of managing, influencing, directing, or
changes in Infra-Red light, Acoustics, and Magnetic protecting. In addition to manned surveillance, security
23
fields . companies are using technologies like GPS tracking,
Some examples of use of IoT in security are: camera observation, stake-outs, data mining and
– Network video recording (NVR) systems - These profiling, and biometric surveillance to aid in the
systems allow real-time viewing of security cameras traditional methods of surveillance.
from devices connected to the Internet. These Drone surveillance presents an easier, faster, and cheaper
systems can be used to view live footage of a home method of data collection, and a number of other key
or business anywhere, at any time and on different advantages. Drone planes can enter narrow and confined
devices. spaces, produce minimal noise, and can be equipped with
– Setting up CCTV systems to work with the alarm night vision cameras and thermal sensors, allowing them
systems – In this case, when an alert is sent to the to provide imagery that the human eye is unable to
home or business owner, they can check the footage detect. While it helps in covering difficult-to-reach areas,
to make sure it is a legitimate alert. These systems it also reduces staff numbers & costs and do not require
are also be used to monitor company vehicles in real much space for their operators. However, India requires
time to enhance their security and surveillance. an enabling regulatory framework to use the drones for
Combined with GPS tracking capabilities, the system these applications while current regulations prohibit any
adds another level of protection as well as added civilian use of drones.

▪ Door and window entry sensors

▪ Panic buttons
▪ Radio frequency identification
tags
▪ Alarm gates
▪ Motion detection sensors
Video ▪ Glass break sensors
Access control
Sensors surveillance ▪ Photoelectric beam sensors
systems
systems

▪ 360 degree Panoramic cameras

▪ Facial recognition
▪ People counting
▪ Drones
▪ Video surveillance

23https://www.theseus.fi/bitstream/handle/10024/130974/Dobre_Valentin.pdf?sequence=1&isAllowed=y
CASE STUDIES
Mantech - Integration of Manpower and Technology
 Report | Private Security Industry 28

CASE STUDY
Protecting high value assets for a Gold Loan
Company
The high value nature of the above-mentioned business, along with information confidentiality, have been the main concerns
of the client. The security services provider offered a solution integrating technology along with provisioning of physical
security, covering the undermentioned aspects: -

Among other things the scope of work included: -

Scope of Work ▪ Monitoring of CCTV feed and command & control center
▪ Safe operation of the vault

▪ Health Monitor
– Monitoring of various inputs in respect of electrical assets of the branches.
– Raising of alert on unusual parameters in equipment.
– Coordination of technicians to manage the problem.
▪ Managed Services
– Real time 24x7 smart monitoring: All activities monitored 24x7 smartly with the use of
Video Analytics.
– Real time alerts for validated alarms: All alarms are validated and an alert for a possible
threat raised via call, email, etc to authorities in real time.
– Remote support to on-ground Emergency Response Team (ERT).
• The command center coordinates with the local police, security agency and fire
Technology and department on as required basis.
Manpower • Additionally, command center uses the two-way communication between itself and the
branches, to cater for exceptions.
▪ Vault Operations
– A mobile based OTP solution has been deployed to create an additional layer of security to
the vault operations. The branches raise a request for OTP every time the staff needs to
enter the branch vault. On raising the request, command center checks the branch for
sanity and safety, using installed CCTV cameras, for the following:
• The branch manager is not under force to request for OTP,
• The branch is clean, and no one is under any threat.
– After due validation, the OTP is sent.
– Post-delivery of the OTP, the vault is monitored live to check the staff to ensure all vault
operations are carried out as per the SOP.

Integration of technology along with provision of manpower for execution at the ground level
provides the security service provider a better control over the security. The technology aspect
of security provides the security personnel the bandwidth to be proactive in adverse situations,
Benefit
rather than being reactive. Internal pilferages has been reduced drastically. This has resulted in
the business process optimisation for the client. It has provided the client with an air tight
security solution, safeguarding property and resources and providing a peace of mind.
 Report | Private Security Industry 29

CASE STUDY
Protecting high value assets for an Oil
Exploration Company
The following are the details of a project that involved a multi-disciplinary engagement combining technology, people,
command centers, vehicles etc. for creating a solution that was customised to solve the client’s requirement for pipeline
security. The solution integrated CCTV, GPS and other technologies to bring in efficiency and reliability.

▪ System Installation, Operation & Maintenance of 10 local control room & 1 central control
room
▪ Deployment of 10 Quick Response Team (QRT) vehicles
Scope of Work
▪ Static guarding at critical installations
▪ Line patrol (2033 Km Pipeline) with app based hand held GPS android device
▪ Multi-location deployment across seven states

▪ 800 + Manpower
▪ 231 Cameras (PTZ & Static) with 139 Network Video Recorder
Technology and
▪ 10 QRT Vehicles with proper branding of client as well as security solution provider
Manpower
▪ 98 GPS enabled android devices for line patrol
▪ 37 solar panels where power grid is not available

Technology, in this case, enabled the security provider to monitor and protect the assets spread
across a wider geography, located in the open, with no physical protection like walls or fences.
CCTV cameras, GPS enabled android devices have been deployed for surveillance as well as for
Benefit
monitoring of patrol activities. This is another example of successful deployment of man-tech and
therefore, ensuring a better security service with better than desired quality at a cost lower than
just deploying the manpower, which otherwise would have been required in massive numbers.
 Report | Private Security Industry 30

ABOUT FICCI

Established in 1927, FICCI is the largest and oldest apex ▪ Minimum Wage policy: Uniformity of wage policies need
business organisation in India. Its history is closely to be considered and should be centralised. FICCI
interwoven with India's struggle for independence, its proposed the Ministry of Labour and employment, GoI to
industrialisation, and its emergence as one of the most advise the state labour departments to implement the 're
rapidly growing global economies. categorisation of Security Guards and Security Supervisors
/ Armed Guards as Skilled workers under State Minimum
A non-government, not-for-profit organisation, FICCI is the Wages notifications, in accordance with Central Minimum
voice of India's business and industry. From influencing Wages notification (S.O.191(E)), so that the real benefit
policy to encouraging debate, engaging with policy makers percolates to the Security Guards across the country.
and civil society, FICCI articulates the views and concerns
▪ Minimum standards/guidelines for cash logistics
of industry. It serves its members from the Indian private
companies: In order to protect the interest of the private
and public corporate sectors and multinational companies,
security operators who render both cash van and armed
drawing its strength from diverse regional chambers of
guards services (comprehensive solution) to banks for ATM
commerce and industry across states, reaching out to over
cash replenishment and other such solutions, there is a
2,50,000 companies.
need for well-articulated standards and guidelines that
must be adhered to. With the recent announcement of
FICCI provides a platform for networking and consensus
minimum operating standards for conducting Cash
building within and across sectors and is the first port of
logistics activities by RBI vide its notification RBI/2017-
call for Indian industry, policy makers and the
18/152, the industry is effectivity placed in reset mode.
international business community.
FICCI has been pursuing the agenda pertaining to
minimum standards and guidelines for Cash Logistics
FICCI Committee on Private Security Industry
companies in India and has submitted several
FICCI has many specialised committees where key concerns
representations.
of the industry are debated and discussed with the specific
aim of presenting the recommendations to the ▪ GST issues concerning the Private Security Industry -
Government for favourable decisions. FICCI has constituted Private Security Agencies (PSAs), who are mainly from the
a Committee on Private Security Industry (PSI) which has small and medium enterprise segments, operate on very
been advocating the key policy issues confronting the thin margins and find it challenging to cope with the
industry. requirements of the GST compliance provisions. Private
Security sector operates on a cost plus pricing model.
Key Focus Areas: Basis for per head cost is applicable Minimum Wage and
▪ Enforcement of Private Security Agencies Regulation statutory obligations like PF, ESIC, Leave, Bonus, Gratuity
(PSAR) Act, 2005: The Private Security Agencies etc. FICCI has made several representations to the
(Regulation) Act introduced a regulatory framework Central and State Government to consider revising the tax
into an otherwise un-regulatory industry, but the act rate and its imposition to address the many issues that
needs to be enforced and implemented effectively. beset the viability of private security industry.
FICCI is advocating the proper enforcement of this act,
across states.
 Report | Private Security Industry 31

ABOUT FICCI

▪ Armed security for cash logistics: The increasing urban Employment for categorisation of security workers as
insecurities and rising incidents of crime have increased skilled and highly skilled workers under Central & State
the demand for armed security. The PSAs in India are, Minimum Wages. In January 2017, recategorisation
however, not authorised to hold arms licenses, and are notified vide a Gazette notification S.O.191(E) and stated
thus forced to employ people having individual arms that Security guards without arms have been categorised
license. FICCI has submitted the draft inputs to Ministry as 'Skilled Workers' and Security guards with arms have
of Home Affairs, Ministry of Finance and RBI for a well- been categorised as 'Highly Skilled Workers’.
articulated policy for the deployment of armed private
▪ Security guard category to be included under new
security guards for the protection of cash vans which
Pradhan Mantri Rojgar Protsahan Yojana(PMRPY) Scheme:
carry crores of public money every day has been
FICCI has submitted a representation mentioning the
submitted to the Government.
suitable changes required to include security guard
▪ Re-categorisation of Private security workers' as category for availing the benefit of PMRPY scheme. FICCI
skilled/highly skilled workers: FICCI has made proposed the Labour Ministry, Government of India, to
continuous efforts in this direction and submitted its consider the security guards from availing the benefit of
recommendations to Ministry of Labour and PMRPY scheme.

Contacts at FICCI

MR. SUMEET GUPTA MS. BHAWANA SHARMA

Senior Director Assistant Director
[email protected] [email protected]

Federation of Indian Chambers of Commerce & Industry

Federation House, Tansen Marg
New Delhi - 110001
T: +91 11 2348756070
F: +91 11 23765333
www.ficci.com
 Report | Private Security Industry 32

BDO GLOBAL

BDO is a leading professional services organisation with ▪ We offer sensible, actionable advice grounded in local knowledge
presence in 162 countries, and over 73,000 people backed by regional and global experience
working out of more than 1,500 offices. We deliver ▪ We set high standards and our global systems give our people
assurance, tax, advisory, and consulting services to responsibility for delivering tailored service that is right for clients
clients throughout the country and around the globe. ▪ We support our clients every step of the way as they expand
abroad

Leading consolidation in the Over 1500 offices in more Over 73,000 highly skilled BDO posted global revenues
mid tier than 160 countries partners and staff worldwide of $8.1 billion in 2017

TO BE THE LEADER FOR EXCEPTIONAL CLIENT SERVICE

anticipating client being clear, open & agreeing to and providing the right creating value
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forthright in our communication commitments: we our people and the clients up to date
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best outcome for promise, everyday, our clients insight and advice
them for every client that they can trust
ANTICIPATING CLEAR MEETING OUR ENCOURAGING OUR
DELIVERING VALUE
CLIENT NEEDS COMMUNICATION COMMITMENTS PEOPLE
 Report | Private Security Industry 33

BDO IN INDIA

BDO in India offers Strategic, Operational, Accounting and Tax & Regulatory advisory & assistance for both domestic and
international organisations. We work cohesively, partnering with our clients to render continued expertise driven advisory.
With a deep cultural understanding of business geography, our functional heads offer knowledge and expertise in
establishing, structuring and operating business in India.

GURUGRAM

AHMEDABAD

KOLKATA
MUMBAI
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CHENNAI

KOCHI

ASSURANCE ADVISORY
▪ Accounting Advisory Services ▪ Business Restructuring Services
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▪ Outsourcing ▪ Transfer Pricing TECHNOLOGY
 Report | Private Security Industry 34

GLOSSARY

AI Artificial Intelligence PF Provident Fund

ATM Automated Teller Machine PMKVY Pradhan Mantri Kaushal Vikas Yojana
FDI Foreign Direct Investment PMRPY Pradhan Mantri Rojgar Protsahan Yojana
CAGR Compounded Annual Growth Rate PSA Private Security Agencies
CCTNS Crime and Criminal Tracking Network Systems
PSARA Private Security Agencies Regulation Act
CCTV Closed Circuit Television
PSI Private Security Industry
DIPP Department of Industrial Policy and Promotion
PSS Private Security Sector
ERT Emergency Response Team
PTZ Pan-Tilt-Zoom
ESI Employees’ State Insurance
QP Qualification Pack
ESIC Employees’ State Insurance Corporation
QRT Quick Response Test
GoI Government of India
RBI Reserve Bank of India
GPS Global Positioning System
RFID Radio Frequency Identification
GST Goods and Services tax
RPL Recognition of Prior Learning
HUF Hindu Undivided Family

IoT Internet of Things SDMS Skilling Database Management System

Information Technology/ Information SOP Standard Operating Procedure

IT/ITES
Technology Enabled Services
SSSDC Security Sector Skill Development Council
MHA Ministry of Home Affairs
ToA Training of Assessors
NCR National Capital Region

NOS National Occupation Standards ToT Training of Trainers

NSDC National Skill Development Corporation TP Training Partner

OTP One Time Password VAT Value Added Tax

OVMS Online Visitor Management System VDA Variable Dearness Allowance

 Report | Private Security Industry 35

NOTES

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BDO in India Federation of Indian Chambers of Commerce & Industry

BDO is a leading professional services organisation with Established in 1927, FICCI is the largest and oldest apex
presence in 162 countries, and over 73,000 people working business organisation in India. Its history is closely interwoven
out of more than 1,500 offices. We deliver assurance, tax, with India's struggle for independence, its industrialisation, and
advisory, and consulting services to clients throughout the its emergence as one of the most rapidly growing global
country and around the globe. economies.
BDO in India offers Strategic, Operational, Accounting and A non-government, not-for-profit organisation, FICCI is the
Tax & Regulatory advisory & assistance for both domestic voice of India's business and industry. From influencing policy
and international organisations. The firm endeavours to be to encouraging debate, engaging with policy makers and civil
the leader in providing exceptional client service as a core society, FICCI articulates the views and concerns of industry.
value proposition offering a range of professional services in It serves its members from the Indian private and public
strategic cities across India. corporate sectors and multinational companies, drawing its
strength from diverse regional chambers of commerce and
With a Partner/Director group of 120+ and a staff strength
industry across states, reaching out to over 2,50,000
of over 1800, the firm is positioned to support the business
companies.
needs of mid-market companies with a comprehensive suite
of tailored solutions. With a deep cultural understanding of FICCI provides a platform for networking and consensus building
business geography, our functional heads offer knowledge within and across sectors and is the first port of call for Indian
and expertise in establishing, structuring and operating industry, policy makers and the international business
business in India. community.

Contacts at BDO in India Contacts at FICCI

CDR GAUTAM NANDA MR. SUMEET GUPTA

Associate Partner Senior Director
Leader - Aerospace, Defence & Security [email protected]
Associate Partner - Government Advisory
[email protected] MS. BHAWANA SHARMA
Assistant Director
CDR KARTIK VIG [email protected]
Director
Aerospace, Defence & Security Disclaimer: The information in this publication has been obtained or derived from sources
Government Advisory believed to be reliable. Though utmost care has been taken to present accurate
information, FICCI makes no representation towards the completeness or correctness of the
[email protected] information contained herein. This document is for information purpose only. This
publication is not intended to be a substitute for professional, legal or technical advice.
FICCI does not accept any liability whatsoever for any direct or consequential loss arising
MR. NIPUN AGGARWAL from any use of this document or its contents.
Senior Manager © Federation of Indian Chambers of Commerce and Industry
Aerospace, Defence & Security (FICCI) 2018. All rights reserved.
Government Advisory
[email protected]

Disclaimer: The information contained herein has been carefully prepared, but it has been
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