Swarajya Logo
Swarajya Logo
Politics States Economy Society Business Culture Infra Defence World Books Ideas Science Technology Heritage Archives Legal Movies Sports
  • Our Views
    Politics States Economy Society Business Culture Infra Defence World Books Ideas Science Technology Heritage Archives Legal Movies Sports
  • Magazine
  • Store

About Swarajya

Swarajya is a publication by Kovai Media Private Limited.

Swarajya - a big tent for liberal right of centre discourse that reaches out, engages and caters to the new India.

editor@swarajyamag.com

Useful Links

  • About Us
  • Subscriptions Support
  • Editorial Philosophy
  • Press Kit
  • Privacy Policy
  • Terms of Use
  • Code of Conduct
  • Plagiarism Policy
  • Refund & Cancellation Policy

Useful Links

  • About Us
  • Subscriptions Support
  • Editorial Philosophy
  • Press Kit
  • Privacy Policy
  • Terms of Use
  • Code of Conduct
  • Plagiarism Policy
  • Refund & Cancellation Policy

Participate

  • Contact Us
  • Write for us
  • Style Guide
  • Jobs

Stay Connected

  • Artboard 2 Copy 6Created with Sketch.
    Artboard 2 Copy 10Created with Sketch.
    Artboard 2 Copy 7Created with Sketch.
    Artboard 2 Copy 9Created with Sketch.
  • Andriod Logo
  • IOS Logo

Economy

Towards An Aatmanirbhar Consulting Ecosystem

Sahil Deo and Vivan SharanWednesday, February 10, 2021 6:24 pm IST
Prime Minister Narendra Modi. (PMO)
Prime Minister Narendra Modi. (PMO)
Prime Minister Narendra Modi. (PMO)
  • The services sector is the perfect ground to nurture aatmanirbharta through deployment of India’s untapped human capital in areas like consulting.
  • On 25 January 2021, US President Joe Biden signed an executive order which mandated that, wherever possible, federal agencies should "maximize the use of goods, products, and materials produced in, and services offered in, the United States.”

    The move, in line with his commitment to rebuild America’s middle class and create more jobs in the country, mirrors a similar appeal by Prime Minister Narendra Modi last year.

    The Prime Minister gave a clarion call for India to become aatmanirbhar or self-reliant, in the wake of Covid-19. The aim was to promote the use of Indian goods and services as widely as possible, and strengthen domestic industry. Since then, various government organisations have taken several proactive steps to promote his vision.

    In a circular issued in July 2020, the government mandated that all cabinet notes should explain how new proposals help in realising the goal of self-reliance.

    Similarly, the Defence Production and Export Policy, 2020, aims to make India a leading manufacturer and exporter of defence products by 2025. Even the recent Union Budget was pegged to the Aatmanirbhar Bharat vision.

    However, when it comes to certain segments of the services sector, this vision of a self-reliant India is found wanting. Take, for instance, consulting services — that range from formulaic management consulting to technology-led and data-driven analytics, and tailormade support for policy design and implementation.

    It is a fact well-known that most government contracts/tenders are cornered by a handful of big firms, whose footprints are visible across the world.

    Although they’re located in India and hire Indian employees, they distort competition for local counterparts through a range of methods, which ultimately harms the economy.

    It’s also well documented that these firms usually draw up roadmaps of large projects in advance of their tender, and use their market dominance to cross-sell their services, practices that negate chances of fair competition. This often leads to long-term dependence on global firms in sensitive areas of government administration.

    Another reason why local consulting firms lose out to global giants is because of the eligibility/qualification criteria in public procurement tenders. Often, governments use turnovers as a benchmark to decide which consulting firm will be awarded a certain contract.

    Due to their global presence and large turnovers, such firms get an unfair advantage over their smaller Indian counterparts that may possess the same skill sets. Benchmarks like track records and turnovers, employed in the manufacturing sector, can’t be used to judge companies operating in the services industry.

    They don’t portray an accurate picture of Indian consulting firms that are as skilled and talented as their global counterparts. For instance, homegrown firms have recently found a niche in data-driven consulting that could be useful in a country where decisionmakers have long struggled to gather reliable evidence. This niche is a natural corollary of the fact that Indians have long excelled in areas like computer science and statistics.

    In order to make management consulting self-reliant, the government can consider a multidimensional approach. First, a larger share of all public procurement funds for consulting can be awarded to small and mid-sized firms. After all, most multinational consulting firms are already large and, consequently, self-reliant.

    The Micro Small and Medium Enterprises (MSME) Act stipulates that 25 per cent of all procurements by central government departments and public sector undertakings will be from the MSME sector. Some commentators have argued that, in practice, several barriers limit these benefits from reaching the MSMEs.

    These include mandatory eligibility clauses, such as the number of purchase orders previously executed. Such entry conditions must be relaxed and the 25 per cent threshold can even be revised upwards in services like consulting, where the size of a firm doesn’t determine its competency.

    Similarly, states could also increase their procurement from smaller firms, in areas where there is enough local capacity.

    Second, expertise, should be the key criteria to award consulting services contracts, not price. When price is given preference in specialised services, the concerned department must provide a concrete justification for it.

    During Covid-19, several multinational consulting firms even provided backstopping support to government departments without pay. This proves the value of government engagement to firms that may monetise such relationships in higher value projects. They also retain the ability to outbid smaller firms for strategic projects, that may yield benefits elsewhere.

    There is also a need to build public awareness around the importance of a quality-centric paradigm, so that bureaucrats can take risks and award contracts to demonstrably competent local firms, without fear of frivolous investigations.

    In fact, a concept paper issued by the Central Vigilance Commission in 2019 talks about the need to revisit India’s fascination with the ‘lowest bidder’ (L1) tendering norm. While this was mooted in the context of high technology or infrastructure projects, the NITI Aayog has also acknowledged the hazards of L1 in a wider procurement context.

    Therefore, it is important for the central government to set qualitative standards to award services contracts. Else, large global firms will continue to corner public procurement contracts and self-reliance will only be a pipe dream for India’s talented consulting firms.

    And finally, public procurement of services is exempt from most international rules that limit a country’s ability to provide exceptional support to domestic companies.

    The World Trade Organization also does not subject its members to any obligations linked to government procurement of services. Therefore, the sector is the perfect proving ground for aatmanirbharta, through deployment of India’s untapped human capital in areas like consulting, where local firms can benefit from well-designed preferential procurement.

    *The authors are founders of domestic consulting firms. Their views are personal.

    Tags
    MSME
    Niti Aayog
    services sector
    Joe Biden
    Prime Minister Narendra Modi
    Manufacturing Sector
    Central Vigilance Commission
    Self-Reliance
    Analytics
    Covid-19
    Consulting
    Aatmanirbhar

    Comments ↓

    An Appeal...


     

    Dear Reader,

     

    As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.

     

    Our business model is you and your subscription.  And in challenging times like these, we need your support now more than ever.

     

    We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.

     

    Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.

    Get Swarajya in your inbox.


    Magazine


    Swarajya Magazine Cover Image
    Merchandise

    Merchandise


      Politics

      How To Think About Telangana Elections

      How To Think About Telangana Elections

      Venu Gopal Narayanan
      3h

      Modi's Pasmanda Outreach: PM Pledges More Health, Education Welfare Schemes For Muslims In Telangana

      Bhuvan Krishna
      6h

      Cabinet Approves Free Ration For Next 5 Years, 16th Finance Commission, Drones To Women SHGs, Rs 24,100 Crore For Tribals

      Bhuvan Krishna
      7h

      Economy

      In A First, Market Capitalisation Of BSE-Listed Companies Surpasses $4 Trillion Mark

      In A First, Market Capitalisation Of BSE-Listed Companies Surpasses $4 Trillion Mark

      Nayan Dwivedi
      8h

      Automobile Retail Sales Hit Record 3.793 Million Units This Festive Season, Surging 19 Per Cent YoY: FADA Report

      Nayan Dwivedi
      1d

      Public Sector Is Finally Beginning To Shine Under Modi's Ministrations

      R Jagannathan
      2d

      Defence

      Indian Navy's Ships Get Indigenous Firepower Boost: MoD Inks Contract Worth Rs 2,956 Crore For 16 Super Rapid Guns

      Indian Navy's Ships Get Indigenous Firepower Boost: MoD Inks Contract Worth Rs 2,956 Crore For 16 Super Rapid Guns

      Ujjwal Shrotryia
      7h

      Defence Ministry Set To Greenlight Proposals Worth More Than Rs 1.3 Lakh Crore For Acquiring 97 Tejas And Upgrading Sukhoi Fighter Jets

      Ujjwal Shrotryia
      9h

      Indian Navy's Second Indigenous Aircraft Carrier Proposal Gains Traction; Defence Acquisition Council To Take It Up Tomorrow

      Ujjwal Shrotryia
      10h

      World

      European Union's Top Court Upholds Ban On Visible Religious Signs Including Headscarf In Public Workplace

      European Union's Top Court Upholds Ban On Visible Religious Signs Including Headscarf In Public Workplace

      Bhuvan Krishna
      3h

      COP28 In Dubai: What To Expect As Global Leaders Set To Meet And Assess Climate Action Progress

      Nayan Dwivedi
      5h

      India Sets Up High-Level Enquiry Panel After US Shares Inputs On Nexus of Terrorists, Organised Criminals And Gun Runners

      Swarajya Staff
      7h

      Culture

      Kashi Tamil Sangamam 2023 To Be Held From 17 December To 30 December, Registration Portal Launched By IIT Madras

      Kashi Tamil Sangamam 2023 To Be Held From 17 December To 30 December, Registration Portal Launched By IIT Madras

      S Rajesh
      10h

      M P N Ponnusamy: A Nagaswara Legend Passes Away Almost Unsung

      K Balakumar
      1d

      Streamlined Repatriation: India-US Deal To Fast-Track Return Of Stolen Antiquities

      Swarajya Staff
      2d
      States

      infrastructure


      Amit Mishra
      1

      BHEL To Collaborate With EDF France On Jaitapur Plant Even As Nuclear Liability Issues Remain Unresolved

      2 Mins Read
      V Bhagya Subhashini
      2

      Mumbai Coastal Road's Promenade: One Kilometre Pilot Stretch Set To Launch In December

      2 Mins Read
      V Bhagya Subhashini
      3

      India's First Bullet Train Station In Mumbai Marks 15 Per Cent Work Completion, To Be Ready By 2027

      2 Mins Read
      Amit Mishra
      4

      Kerala: Third Chinese Ship Carrying Crane Docks At Vizhinjam International Seaport

      2 Mins Read