Rural Development Dept keen to rationalise pay for its consultants

• The department of Rural Development, which has taken over 250 consultants on contract, has set up a committee to suggest “measures for rationalisation” of emoluments being paid to them.

Highlights:

• The Department of Rural Development has established a committee to review the pay structure of its 250+ contracted consultants working across various programs, including MNREGA, Mission Antyodaya, National Social Assistance Program, among others.
• This nine-member committee, led by Additional Secretary T K Anil Kumar, will evaluate current emoluments across different divisions and suggest adjustments for fairer and more consistent pay.

Background and Context:

• The committee's formation follows a report from the Indian Institute of Public Administration (IIPA), which recommended adopting Standard Operating Procedures (SOPs) for hiring consultants and ensuring that hiring practices comply with the General Financial Rule (GFR).
• The aim is to address significant discrepancies in consultant salaries and streamline compensation across departments.

Disparities in Consultant Pay and Government Spending:

• The Union Finance Ministry reported notable inconsistencies in consultant salaries across government departments, with some consultants earning up to ten times more than others. In some cases, consultants’ earnings exceed those of high-ranking officials, such as Secretary-level officers.
• The report reveals that 1,499 consultants from external agencies, including Big Four firms (Ernst & Young, PwC, Deloitte, and KPMG), were hired across 44 government departments, with Rs 302 crore spent annually on these consultants.
• In addition to consultants, government departments have also hired 1,037 Young Professionals, 539 independent consultants, 354 domain experts, 1,481 retired officers, and 20,376 other lower-paid contract staff.
• While precise expenditure data for these hires is unavailable, this additional workforce signifies a substantial investment in contract-based roles.

Government’s Focus on Capacity Building and Fiscal Accountability:

• With the Capacity Building Commission in place, the government is not only focusing on consultant remuneration but also emphasizing internal capacity building to upskill government employees. This approach is aimed at developing in-house expertise, potentially reducing reliance on costly external consultants.
• Earlier, the Department of Expenditure under the Finance Ministry sought comprehensive data on contract-based workforce to facilitate informed discussions on budget allocations for professional and office expenses for the 2024-25 budget cycle.

Departments with the Most Consultants:

• Six departments together account for 58% of the total consultants hired:
  • Health and Family Welfare – 203 consultants
  • Rural Development – 166 consultants
  • Agriculture and Farmers Welfare – 149 consultants
  • Ministry of Housing and Urban Administration – 147 consultants
  • Women and Child Development – 112 consultants
  • Road Transport and Highway – 99 consultants
• Independent consultants and domain experts generally earn between Rs 1 lakh and Rs 4 lakh per month, making standardized pay a priority in managing government resources efficiently.

Prelims Takeaways

• General Financial Rule (GFR).
• Standard Operating Procedures (SOPs)