 "Big Four firms")
Sixteen ministries and departments in the central government outsourced several crucial assignments covering many facets of governance to top multinational consultancy firms, mainly the "Big Four" plus McKinsey & Co, according to a report by The Indian Express (IE).
Under information made available under the Right To Information (RTI) Act, reports show that PricewaterhouseCoopers (PwC), Deloitte Touche Tohmatsu Limited, Ernst & Young Global Limited and KPMG International Limited, along with McKinsey & Company, secured at least 308 consultancy assignments worth nearly Rs 500 crore from various government ministries, departments and organisations.
According to records, these assignments covered across-the-board activities, including "financial due diligence", "retainer for advisory service", "hiring technical consultants," and even "evaluation of nominations for e-governance awards".
Which departments and ministries outsourced work to these five firms?
According to the IE report, about fifty organisations and 16 departments/ ministries outsourced work to these consultancy firms, which include civil aviation; public enterprises; electronics and information technology; health and family welfare; petroleum and natural gas; rural development, forest and climate change; tourism; administrative reforms and public grievances; promotion of industry and internal trade; coal, skill development and entrepreneurship; defence; and non-conventional energy resources; power; road transport and highways.
What is the "Big Four"?
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Big Four is a term that refers to the four largest accounting and professional services firms in the world. The "Big Four" refers to Deloitte, Ernst & Young (EY), KPMG, and PwC. The term is used to denote their gigantic size, reputation, and massive global influence. These Big Four firms execute plenty of auditing work and consultancy for the majority of publicly traded companies and governments across the globe. According to economists Mariana Mazzucato and Rosie Collington, the worldwide market for consulting services is now worth as much as a trillion dollars a year.
Critics argue that corporate suits with prestigious degrees claim to offer cutting-edge expertise but seek to make governments function more like businesses.
The IE report mentions five firms, including the Big Four and McKinsey & Co., together referred to as the "Big Five".
Which "Big Five" firm secured the most contracts?
IE reported that PwC bagged the highest number of contracts, securing at least 92 contracts for over Rs 156 crore between 2017 and 2022. Deloitte was second with 59 assignments worth over Rs 130.13 crore. The amounts involved in four of those contracts were not provided.
E&Y secured 87 contracts for Rs 88.05 crore, while KPMG got 66 contracts worth Rs 68.46 crore. McKinsey bagged three contracts for Rs 50.09 crore.
Which sectors and ministries awarded the most contracts to the "Big Five" firms?
Records accessed by IE show that between April 2017 and June 2022, the Ministry of Petroleum and Natural Gas and four of its PSUs awarded contracts worth over Rs 170 crore. Citing the "trade secret" clause of the RTI Act, Indian Oil Corporation declined to provide the data on the contracts it awarded to the consultancy firms.
Second on the list is the power sector, with nine organisations under the power ministry, which gave assignments worth Rs 166.41 crore to the "Big Five" consultancies.
Union Ministry of Finance asks ministries and departments to provide details
The Union Ministry of Finance has instructed all ministries and departments to provide details of the consultants appointed by them. The ministry has asked them to provide information on the selection process, tenure and average remuneration of the consultants.
In a letter addressed to ministries, Special Secretary in the Department of Expenditure in the Ministry of Finance, Annie George Mathew, asked ministries and departments to furnish details to facilitate the "meaningful discussion for allocation of Budget under the Professional/ Office expenses/ Salary head". The letter asks them to accord the issue "Top Priority" and provide the details by October 9. Sources told IE that responses from some departments are still awaited.
