The Centre has taken an important step to make government consultancy contracts more accessible to Indian firms. The Department of Expenditure under the Finance Ministry has advised ministries and government departments to avoid unnecessarily strict eligibility conditions while inviting consultancy bids.
The move is expected to increase competition and reduce the advantage traditionally enjoyed by large multinational firms such as Deloitte, PwC, EY and KPMG.
Government departments often hire consultancy firms for policy planning, project management, financial studies, technical advice, digital transformation and other specialised work. However, many smaller and mid-sized Indian firms have found it difficult to participate in such tenders because of conditions related to company turnover, past experience and the number of employees on the payroll.
These requirements may appear reasonable at first, but they can exclude firms that have skilled professionals and relevant experience but do not have the financial size of a global consulting network.
Under the new advisory, procuring authorities have been asked not to set very high annual turnover requirements unless such conditions are genuinely necessary for a particular assignment. A large turnover does not always prove that a company is the best choice for a specific project.
For example, a specialised Indian firm may understand local transport, agriculture, manufacturing or state-level administration better than a much larger international company. The revised approach is intended to ensure that the real needs of the project remain more important than the overall size of the bidder.
The government has also advised departments to carefully decide how much importance should be given to a consultancy firm’s previous assignments. Earlier, a company’s overall experience could receive significant weight in the evaluation process. This often benefited established global firms because they had long records of working on large projects across several countries. The revised system is expected to give greater importance to experience in assignments that are similar to the work being offered. This could allow a smaller firm with focused expertise to compete more fairly.
Another important change concerns the minimum number of employees that a bidder must have on its permanent payroll. The advisory says that staffing requirements should match the actual manpower needed for the project.
A consultancy company should not be rejected simply because it does not maintain a very large permanent workforce when the assignment requires only a small team of specialised experts. This is especially relevant for modern firms that work through flexible teams and bring together professionals according to the needs of each project.
The reforms are connected with government procurement through the Government e-Marketplace, commonly known as GeM. The platform allows government departments, public sector organisations and other public bodies to purchase services through a structured and competitive process.
If tender conditions become more practical, more Indian consultancy companies may be able to register, submit bids and compete for public assignments.
The policy also supports the broader objective of Atmanirbhar Bharat. The aim is not simply to favour Indian firms, but to help them grow by giving them access to important projects.
Government contracts can provide domestic companies with revenue, experience, professional visibility and opportunities to build stronger teams. Over time, these firms may be able to take on larger assignments in India and compete in international markets.
The need for such reform has become clearer because government consultancy work has often been concentrated among a few large international companies. An earlier investigation found that the Big Four firms and McKinsey received at least 308 consultancy assignments worth nearly Rs 500 crore from 16 central ministries and departments between April 2017 and June 2022. These assignments covered areas ranging from financial due diligence and technical consulting to governance and digital projects.
The relaxed rules do not mean that quality or financial capability will be ignored. Firms will still need to show relevant experience, qualified professionals and the ability to complete the assignment properly. The main change is that eligibility conditions should be linked to the actual requirements of the project rather than being made unnecessarily difficult.
For government departments, wider participation may bring more ideas, better pricing and stronger local knowledge. For Indian consultancy firms, the reforms could provide a chance to compete on the basis of talent and project experience instead of size alone.
The success of the policy will depend on how carefully ministries apply the advisory and whether tender conditions become genuinely open, transparent and connected to the work involved.
