The government has taken a decision against renewing contracts given to consultants from bilateral and multilateral agencies that expired end-December 2015 . It has instead set up a new Screening Committee to approve the appointment of consultants by various departments and ministries, thereby ending the existing practice of ministries and departments directly engaging consultants from these institutions for specific projects. According to the finance ministry, Centre has also decided not to engage consultants for policy formulation, presumably to eliminate their influence in policy making.
Analysts indicated that this order could affect agencies such as World Bank, Asian Development Bank and Japan International Cooperation Agency, which have been deploying consultants for infrastructure and social sector projects in India. The proposed screening committee, which will clear the appointment of consultants, will comprise the Cabinet secretary Pradeep Kumar Sinha, economic affairs secretary Shaktikanta Das and the secretary representing the concerned department.
“All contracts of existing consultants whose tenure is coming to an end by or before December 31, 2015 may be terminated at the end of their consultancy tenure. No renewal beyond December 31, 2015 shall be granted to the existing consultants by the ministry/department unless approved by the screening committee,” the finance ministry circular dated December 29 noted.
On the move, Jaijit Bhattacharya, partner, infrastructure and government team at consultancy firm KPMG said: “It appears the government would like to maintain its sovereignty over policy making and hence has added one more layer of filtering for hiring consultants from bilateral and multilateral agencies.” Another consultant with a leading consultancy firm, who did not want to be identified, said the screening panel route could make the selection process “bureaucratic and lengthy”. “Consultants are needed in a number projects as independent evaluators and for their industry expertise. The government departments very often do not have the adequate programme management capability. Not renewing their contracts is like taking one step backward,” he added.
The government, the circular said, has issued this order to stop interference of bilateral and multilateral agencies — often working in interests of their main funding country — in India’s policy making process. “Consultants should not be engaged for policy formulation. If assistance from consultants is considered necessary, their role should be limited to presentation and analysis of possible options with supporting data and best practices,” the finance ministry circular said.
In case of foreign nationals being appointed as consultant, the concerned ministry will have to first obtain security clearance from the Ministry of Home Affairs. Consultants can be engaged only for one year at a time and any extension has to be approved by the Screening Committee. The maximum tenure of any consultant cannot exceed three years, the circular said.