On October 4 this year, the Union finance ministry asked all ministries and departments to furnish details of the consultants appointed by them, including their strength, selection process, normal tenure and average remuneration. In the letter, Annie George Mathew, special secretary in the expenditure department, said, “The information is required for meaningful discussion for allocation of budget under the professional office expenses/salary head.” An RTI reply published in a newspaper on November 7 sais that between April 2017 and June 2022, the ‘Big Four’ consultants—PwC, Deloitte, Ernst & Young and KPMG—and the US-based McKinsey had grabbed 308 consultancy projects worth nearly `500 crore from 16 government agencies including the NITI Aayog and Aadhaar authority. This brings up the legitimate question: can policy issues under national projects such as Make in India and Atmanirbhar Bharat be outsourced to consultants?
Indeed, this is not the first time I have heard of the excessive use of consultants, not just by the central government but also by the states. I had a recent interaction with a few mid-level All India Service officers from different states at an administrative training institution. Instead of inflicting a dreary talk on them about what they must and must not do, I let them talk. They spoke freely. They spoke in particular about the excessive role of private consultants in all spheres of work. One of the officers mentioned that our democracy had now become “of the consultants, by the consultants, for the consultants”. I had heard earlier of the invasion of the NITI Aayog by a phalanx of consultants of various kinds. Index after index was produced to instil a sense of fierce competition between states. Somehow, the concepts of ‘Team India’ and Centre-state cooperation about which Modi waxed eloquent in 2014 seemed to have fallen by the wayside. And then, the central government openly came out with the concept of ‘double-engine sarkar’, implying that it would take sides in this battle.
Lest I be misunderstood, let me hasten to add that this deep attachment to private consultants is not confined to our country alone. Somdeep Sen, who teaches international studies at Roskilde University, said in an article that the UK, Canada and France as well as some renowned universities have taken wholeheartedly to the employment of consultants. Why? Says Prof Sen, “At its core, this is about a belief that public institutions, organisations and services can only be efficient when they are modelled after the private sector. Efficiency, according to this ethos, is not achieved through better policy or structural change pertaining to a specific problem but through private sector management practices and standards that are presumed as universally applicable, irrespective of the specificity of the problem.”
Is this true about India with its huge rural hinterland, millions of migrant workers, high levels of poverty and illiteracy, and inadequate health facilities? Are public administration and corporate governance comparable? Public administration is about people and their welfare, while corporate governance is aimed at the maximisation of returns to the investor and higher stock values. The public administrator’s duties are multifarious and the corporate administrator knows clearly what he has to achieve. The public administrator has different goals at different times as his area of activity changes or governments themselves change. He deals with many different areas of crucial importance for the welfare of people, he meets multitudes of them, learns to solve diverse problems, meets unending demands, deals with umpteen grievances, communicates with people, and resolves differences. This is in no way similar to the work that a corporate employee has to do. Hence the ill-considered faith in consultants to solve all problems and the attribution of failures in public administration to the people who man administrative offices is completely misplaced.
Consultants have their role in specific technical areas where expertise of a particular kind is required. The tendency towards outsourcing regular government work to consultants will ultimately adversely affect the quality of administration. The effectiveness of administration should be judged not on the basis of PowerPoint presentations or technical analyses of digital files, but on the impact it has on the intended beneficiaries. This requires a deep connection with the field. Earlier, there used to be a strict injunction that figures can only be presented in cabinet notes, not graphs. This was because graphs could be manipulated by ‘fixing’ the Y or X axis, while figures in tabular form gave a better picture. In this age of PPTs, I wonder whether this instruction still exists.
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The biggest casualty could be accountability. There have been innumerable instances worldwide of consultancy errors. The South African Revenue Service engaged Bain and Company for a restructuring exercise, which flopped and led to a decline in tax collection. Capita, a services outsourcing company, was attacked for bungling primary health services under the UK’s National Health Service. The Phoenix Pay system, developed by Deloitte for the Canadian government, faced severe criticism for mistakes in payment to government staff. Prof Sen went on to say in his article, “In their book The Big Con, economists Mariana Mazzucato and Rosie Collington rightly point out that consultancies perform a ‘confidence trick’ where they may not have ownership of any scarce, expert knowledge. Yet, they ‘create an impression of value’ that in turn allows them to demand compensation that ‘far exceeds’ the actual value of the knowledge they bring to the table.”
The focus of administration must not get lost in a medley of consultancies. The problem with public administration in India is not a lack of knowledge or the unavailability of qualified, well-trained officers. Many Indian civil servants have achieved tremendous results in particular areas, where they have built enduring systems and institutions, and have qualifications as good as the best in corporate India. The challenge, really, is to build an overarching results-based system that takes into account the diversity of government work and is flexible enough to change according to need. This requires the collective effort of all ministries, departments and institutions. Consultancies can provide no shortcuts to paradise—the government has to bite the bullet and take responsibility for itself.
K M Chandrasekhar
Former Cabinet Secretary and author of As Good as My Word: A Memoir
(Views are personal)