Defence Ministry allows the entry of private consultants Ernst & Young and KPMG!

What purpose would the two Big 4 Accounting firms solve in the large order procurements of the Defence Ministry?

What purpose would the two Big 4 Accounting firms solve in the large order procurements of the Defence Ministry?
What purpose would the two Big 4 Accounting firms solve in the large order procurements of the Defence Ministry? Graphic: BusinessToday.In

Why are lobbying firms allowed? A first in India

For the first time, the Defence Ministry, under Nirmala Sitharaman has given entry to private consultants Ernst & Young (E&Y) and Klynveld Peat Marwick Goerdeler (KPMG) into the decision making body of Defence purchases that exceed Rs.500 crores ($78 million).  According to the Press Release dated February 7, the Defence Minister has formed an Advisory Committee with 13 members for the “Capital Projects (RMCOMP)”. The decision has been taken to expedite capital acquisitions to bolster armed forces preparedness, said the press release.

The question is why these are these multinational behemoths being allowed in the Defence Ministry’s decision making process? What kind of “advice”  will these persons give to Nirmala Sitharaman, when there are qualified officials from the services?

R Anand, Special Advisor E&Y and Amber Dubey, Partner Head, Aerospace & Defence, KPMG are the representatives of the two private consultancy firms in the Advisory Committee along with serving and retired defence personnel. Private consultants (euphemism for lobbyists) are now being allowed to enter into the decision-making process of high volume defence purchases.

According to the Press Release (published at the end of this post) these are the main functions of this Advisory Committee: “Undertake independent review and status check of identified ongoing critical capital projects above Rs.500 crores including ‘Mission Mode’ projects, ‘Make’ projects, ‘Buy (Indian)’, ‘Buy (Indian – IDDM)’, ‘Buy and Make’ and ‘Buy and Make (Indian)’ projects as well as ‘Design and Development’ projects under the Ministry. Assess the physical and financial progress of these schemes/ projects. Identify specific bottlenecks and concerns that are responsible for delays, wherever applicable and suggest the way forward. Any other issues related to project monitoring and appraisal that may be referred by MoD…”

The question is why these are these multinational behemoths being allowed in the Defence Ministry’s decision making process? What kind of “advice”  will these persons give to Nirmala Sitharaman, when there are qualified officials from the services?

We respectfully disagree with the working style of Nirmala Sitharaman in the Defence Ministry. She committed a huge mistake by orally allowing the J & K Chief Minister to file a First Information Report (FIR) against a serving Major who acted against Kashmiri stone pelters[1]. And now, the Supreme Court has stepped in to grant a stay, while the Raksha Mantri keeps a studied silence.

Prior to plunging into Indian politics, Nirmala was a staffer of another private consultancy in the London branch of Price Waterhouse Coopers as a Senior Manager. Is Ms. Sitharaman out of her depth in the Defence Ministry?

Defence Ministry Press Release Page 1
Defence Ministry Press Release Page 2
Fig 1. Defence Ministry Press Release

Note:
1. The conversion rate used in this article is 1 USD = 64.55 Rupees.

References:

[1] In conversation with Dr. Subramanian Swamy – Feb 11, 2018, PGurus.com

Team PGurus

We are a team of focused individuals with expertise in at least one of the following fields viz. Journalism, Technology, Economics, Politics, Sports & Business. We are factual, accurate and unbiased.

9 COMMENTS

  1. Not acceptable. How can we disclose our long term readiness planning to the reps of MNC. This may open up strategy and capability development roadmap to enemy countries around us. Further, its very sensitive subject for the interest of our nation when we are talking about mission mode projects as well.

    Further, all the techno-commercial information w.r.t project objective, target force multiplication, scope, financial quotes etc are under classified information. How, can these be open even to any advisory committee of such larch spectrum including reps of MNC
    It’s really a surprise and seriously puts a question on the capability of MoD?

  2. The only right person who had the competence and foresight to keep all conniving hands away from the most lucrative ministry – defence was Manohar Parikkar.. He cleaned up procurement related issues and process in the short stint as Def min. Whether goa was the only reason he was moved or the pressure from lobbies is a hard thing to know for now. The fact the likes of KPMG and EY are roped in speaks volumes about the intent and abilities of the Def Ministry.. EY and KPMG and every other consultant play for their clients which is the person who pays them highest.. Agents masquerading as consultants who were rightfully kept away just like the middlemen when Parrikar began the cleanup.. Unfortunately he could not be there for long

  3. Defence matters should be kept out of reach of any agency that has overseas connections, for the sake of security of our nation. International consultancy groups are no exception. No point regretting latter when a catastraphy strikes.

  4. If defence procurement is left to only defence, people cry hoarse. If bureaucrats from the ministry join the decision making, again people shout from roof top. If now 2 of the world’s biggest consultant are in the advisory committee, again people are upset.
    What shall be ideal constitution, why not make your own recommendation and help Def Min instead of objecting/ criticizing her. is it because it is easy to criticize?
    Also making an implied allegation that since she was with PWC, she has brought in E&Y and KPMG is self defeating. If her intentions were wrong, why not PWC, to whom she would have felt more grateful to.
    Global consultants bring in global practices, the way purchases happen in other countries and if they can improve purchase practices in Indian defence, why not. by the way, they are not alone but 2 out of a 13 member panel and hence can’t bring in corruption/ influence till other members are willing to.

  5. Do not know what external pressure is acting on the Defense Ministry. It is a blunder !! The financial information will fall in wrong hands !! Russia (KGB), USA (CIA) & China to start with. Expect other defense manufacturers to tweak their prices to juice India.

  6. My expectations is, a MoD should be only a man from Infantry of Army who had experience of “Death” in face to face, as in Isreal.
    Ex Private consultant like another private consultant only. பேய் ஆட்சி செய்தால் பிணம் திண்ணும் சாத்திரமாம்!

    • You are right.

      Bharath’s Rulers like RajaRaja Chozhan , Rajendra Chozhan , Vikramadithya ,
      Sri.Ramar were all WARRIORS. Well versed in Warfare , Statecraft & Vedic Ethos.

      Pakistan is winning as it is their ARMY which calls the shots.
      In America too many Presidents have served in Army or CIA .

      India is totally messed up. Just because Netanyahu hugged Modi India CANNOT become
      ISRAEL.

      Indian establishment has always been fond of keeping its Army ( Navy , Air Force included) under its stranglehold. Indian politicians seldom die as they always ensure they are adequately surrounded & protected by various Commandos. The politicians of India have
      always ( bjp & congress both are the same) bludgeoned on our Army to ” lay down their lives while protecting civilians & this motherRRRRland”. The terrorists are called ”civilians” ” separatists” ” freedom fighters” by indian media , bbc & gorement of india itself.

      I was SHOCKED to come across a photo of this Nirmala Seetharaman fondly slavishly clutching the hands of EVIL burkha dutt flanked by equally fawning piyush goyal of bjp.

      ”A picture is worth a thousand words” says a Chinese Proverb.

      By coming up with treacly tweets flattering Nirmala Seetharaman ” woman becoming defense minister feminism blah blah” burkha dutts & similar clones had neatly bowled over Nirmala Seetharaman . Who presents a steely exterior while facing CHINESE Troops.

      In Valmiki Ramayanam Sri.Ramar has dwelt extensively on Statecraft. He cautions women should never be empowered in various such crucial vital posts.

      Sometime back Sri. Ramar was vindicated once again when in an American Prison two hardened criminals kept under high security prisons managed to escape only because of a FEMALE cop / warden who fell into their trap of flattery .

      Whatever Lord says are ABSOLUTE Truths. Not debatable points.

LEAVE A REPLY