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In handholding government projects, Big Four firms see next opportunity

The tie-ups of the firms with the government don’t just stop within Indian boundaries.

Allahabad/ New Delhi, New Delhi | Published: February 16, 2015 2:43:57 am

By: Udit Roy

The Big Four consulting majors — EY, Deloitte, PwC and KPMG — are making a renewed pitch for government assignments, buoyed by the steady stream of project launches by the NDA government ever since it assumed office eight months ago. With new project launches such as the ‘Make in India’ campaign and ‘Digital India’ offering the potential of being big-ticket revenue drivers, all the consulting firms have scaled up their manpower deployment on government projects, with EY ramping up the number by nearly 10 times as compared to what it had five years back, PwC more than doubling its manpower over the same period and Deloitte scaling up the number of those working on government projects by almost seven-fold.

KPMG too is scaling up. Arvind Mahajan, head of infrastructure and government services, KPMG in India said, “This sector is one of our strategic growth initiatives and big driver of firm growth; we are looking at four-times growth and should have more than 500 persons in the next year.” The increase has mostly occurred in the wake of the government initiatives brought out over the past year. “In just the last year, there has been a 40 per cent growth in the number of people employed to handle the sector,” said Neel Ratan, government leader at PwC.

The areas where the firms have concentrated hand-holding with the government span across a variety of sectors — e-governance, skill development, upgradation of technology at MSMEs, infrastructure and administrative reforms, among many others.

The companies have already seen an increase of 20-30 per cent in their revenue derived from government projects. While there was an 30-40 per cent surge in EY’s top line growth over the last four years, Deloitte recorded a 25 per cent rise in its profitable growth. In the corresponding period, PwC said there has been a three-fold increase in the revenue that the firm earns from such projects.

trapAll of this stems from a high degree of confidence that the firms seem to share regarding the investor-friendliness that the present circumstances portray. “There is indeed a high sense of optimism. These national programs will not only expand the government consulting market very significantly but will also have a considerable impact in expanding the economy,” said Jaijit Bhattacharya, government transformation expert and partner, KPMG. According to Vedamoorthy Namasivayam, senior director, Deloitte the major change has been firstly, the swiftness from the side of the government regarding these projects and secondly, the expectation from the client and the complexity of the projects themselves.

The tie-ups of the firms with the government don’t just stop within Indian boundaries. Almost all the four have been working on projects in South-East Asia and Africa that involve the governments of countries such as Bangladesh, Nigeria and Kenya.

Guru Malladi, partner and leader, government advisory service, EY, added, “As governments are increasingly getting smarter, the focus is also shifting towards ensuring the delivery of services to the citizen in a seamless way. This trend necessitates a new outlook of project delivery for firms such as EY. Accordingly, you will see in future, the focus of Big Four shifting from merely advising to having end-to-end delivery.”

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