Not everyone in Cong is happy about Karnataka hiring BCG as consultant at Rs 9.5 cr for 6 months

Congress leader Praveen Chakravarty has questioned Siddaramaiah government’s decision to appoint Boston Consulting Group (BCG) as an advisor to help Karnataka get a fix on its revenues. The move aims to unlock budget potential of the state, with the BCG reportedly getting a fee of ₹9.5 crore for six months of consultancy work.

Chakravarty in a post in X said, "If one wins elections by outsourcing core political functions to external fee-charging transactional consultants, then one also governs by outsourcing core policy functions to similar consultants!” 

His sentiment was echoed by Leader of the Opposition R Ashoka, who questioned the necessity of BCG's appointment, especially given the presence of an "economist" like Siddaramaiah as Chief Minister.

BCG's primary task is to identify and implement initiatives to boost both tax and non-tax revenues, reduce expenses, explore innovative funding sources, foster public-private partnerships (PPPs), leverage technology to plug leakages, and monetize state assets. 

Their focus will be on key departments such as irrigation, energy, public works, and rural development, while also finding new revenue streams in mining and forestry.

Despite the criticism, the finance department has backed its decision, stating that professional consultants bring new ideas and practices that an overburdened bureaucracy might not be able to handle. The goal is reportedly to mobilize an additional ₹5,000 crore per year for developing satellite towns around Bengaluru and other municipal corporations across the state.

This consultancy contract comes amid the state's ambitious but costly guarantee schemes. These schemes, which include free electricity, monetary support to women and unemployed youth, and free travel for women in state-run buses, are projected to cost the exchequer ₹36,000 crore in 2023-24 alone. To fund these guarantees, the government has increased taxes on fuel, property, liquor, and other areas, and is considering further hikes.