The Finance Ministry has issued a stern warning to central government entities against prescribing excessively high turnover and payroll requirements in GeM consultancy tenders. In an office memorandum dated July 22, 2026, the Department of Expenditure advised procuring agencies to ensure that prescribed minimum staff strength is commensurate with the manpower required for satisfactory execution of consultancy assignments. The memorandum, issued by the Procurement Policy Division, specifically warned that disproportionately high staff strength requirements without adequate justification may unnecessarily restrict competition in consultancy service procurement.
A sample study of consultancy procurement tenders floated on GeM over the last three financial years revealed significant issues with eligibility and qualification criteria. The study found instances of comparatively high turnover requirements and higher weightage being assigned to the consulting firm's experience rather than to the qualifications and experience of proposed key personnel. Most concerning, the study discovered that minimum staff strength on the bidder's payroll was prescribed as an eligibility criterion, far exceeding the actual manpower required for project execution. According to the Expenditure Department, these findings indicate that such eligibility and qualification criteria may unduly restrict competition in the procurement of consultancy services.
The Finance Ministry has advised procuring entities to adhere to the provisions of the Manual for Procurement of Consultancy Services, Second Edition, 2025 while formulating eligibility and qualification criteria. The memorandum was issued to the Secretaries of all Central Government Ministries and Departments, making it mandatory for all government entities to follow these guidelines. The revised norms discourage procuring entities from setting excessively high turnover thresholds and stipulate that minimum payroll staff requirements are proportionate to the manpower actually needed for assignments.
India's management consulting and business advisory services market is estimated to be worth about ₹9.36 billion in 2026, according to market research firm Mordor Intelligence. The segment is projected to grow to over ₹17 billion by 2031. According to government officials, the study of consultancy procurement tenders showed that some organizations prescribed minimum annual turnover requirements of five to 10 times the estimated cost of consultancy assignments, which could restrict competition without necessarily improving service quality.
Industry experts welcome the policy changes, with DVS Advisory Group's Divakar Vijayasarathy noting that high turnover thresholds and excessive reliance on past credentials have kept many capable Indian consulting firms out of government projects. The proposed changes are intended to create a level playing field and enable domestic firms to win larger mandates while reinvesting in talent and capabilities. Cygnet.One's Pankaj Dikshit emphasized that inclusive and participative policies are needed to allow marginalized and budding consultancy entrepreneurship to grow, particularly as the government has proposed in September 2025 to set up multi-disciplinary partnership firms to compete with global consulting giants.
