New Delhi: The idea of engaging private consultants to draft public policies has caught the fancy of the Modi government. Now, various ministries are increasingly outsourcing this job to professionals. Senior government officials FC spoke to, however, said the new trend has many pitfalls. Impartial policy-making faces risks as conflict of interest could arise, they said, adding that the same consultant advises the government as well as private firms it seeks to reign in.
Earlier, the government generally hired academics and technical experts for inputs while devising major economic policies. For instance, the civil aviation ministry in the past burnt mid-night oil to prepare policies, but now it prefers to outsource the work. It drew inputs heavily from consultancy firm KPMG for the national civil aviation policy, touted as the first such document for the sector.
Subsequently, Deloitte was roped in for preparing the blueprint for regional connectivity. It is now working with KPMG again for drafting model concession agreement (MCA) for PPP airports.
An Air India insider, who was in the loop for making payments to KPMG for their inputs on aviation policy, said the actual amount paid to the consultant was much higher than initially considered. KPMG was not directly hired by the ministry for aviation policy and Air India was asked to foot the bill. For the MCA, state-run Airports Authority of India (AAI) would make the payment.
“What baffles one is that at times there is no structured report from consultants. AAI had assigned some studies to top consultancies BCG and McKinsey and paid crores of rupees, but a well-structured report is yet to come from them,” said an AAI official.
Senior government officials said that apart from high expenditure, hiring outside firms stunt the in-house competence of ministries. They said many relatives of top functionaries work with the consultancy firms and this helps them get government jobs. Not surprisingly, many firms that started as audit firms now have significant revenue coming from their consultancy divisions.
“They (consultants) seem to have made a lot of in-roads into the government through their sleek presentations etc and quite honestly officers also find it convenient because they have to work less and they say that this is recommendation of this consultant and that consultant,” a top officer said wishing not to be named.
In a reply to a Parliament question on consultants engaged by Niti Aayog, the government had last year said that various outside firms had been engaged by it to work in the area of public health, education and tourism. It named Ernst & Young, BCG, Piramal Foundation, IPE Global, Horwath HTL France and Crowe Horwath HTL Consultants, among others, working on various projects.
“Niti Aayog whose whole job is to give consultancy to the government has gone heavily into this and this has been picked up by other ministries which are handling projects and policies. They are spending huge amount of money on that,” said another official, who also did not wish to be named.
The official, who has held top positions in the government, however, noted that sourcing of inputs from private consultants may not necessarily impact the final outcome.
“All major policies go through inter-ministerial consultation. The nodal ministries have their own wisdom. And finally it goes through the Union cabinet. So, there is a solid procedure. But some influence from outside can not be ruled out,” he added.
It may be noted that there is no bar from the government on hiring consultants but it certainly stresses on engaging them where deep domain knowledge or specialised service is required....