Calcutta, July 22: McKinsey was hired to scout for investments, Infosys chief N.R. Narayana Murthy was petitioned to help formulate an information technology policy and now the government has roped in another high-profile consulting company to restructure the role of its nodal IT agency.
The Buddhadeb Bhattacharjee government has asked Ernst & Young to reorient and refocus the activities of the West Bengal Electronics Industry Development Corporation, better known as Webel, to make the organisation “meaningful, effective and profit making”.
“The government wanted to get professionals to look at what should be the right course of action for Webel in view of the new IT policy, which will be announced shortly,” said S.K. Mitra, the managing director of Webel.
The consultants have been given a “free hand” to go through the existing activities of Webel and chart out the future course of action in the light of a changing business environment. To draw lessons from success stories in other states, Ernst & Young has been asked to review the functions of government-owned promotional agencies in Karnataka, Andhra Pradesh and Maharashtra.
“They are assessing our existing operations and we have told our officials to co-operate with them and furnish them with the details they are interested in,” said Mitra.
One of the most important tasks for the consulting company in the Rs 12-lakh project is looking into Webel’s state of finances and making it more profitable. In the last fiscal, the corporation had registered Rs 73 lakh as profit before tax.
The government-owned outfit is responsible for facilitating investments in the IT sector and spearheading the government’s infotech initiatives across the state. Webel has a workforce of around 1,100 people, including those in its 14 subsidiaries. Some of these subsidiaries are in dire straits and are surviving on budgetary support.
Protests by the Citu-affiliated employees’ union and lack of consensus within the CPM had put disinvestment of the loss-making units — as per recommendations of L.B. Jha and Company, submitted to the government in 2000 — on the backburner. Other than forming a strategic business expert group, the government is yet to take any effective step to restructure the organisation.
To steer clear of controversy, contentious issues like rationalisation of workforce do not come under the purview of the assignment given to Ernst & Young. But the Webel managing director said that it is well within the rights of the consultants to suggest “workforce reorganisation”. The report will be handed over to the government by August-end and implemented by the end of the year, provided the government clears the proposals.
“I don’t know what the proposals would be. But in case there are suggestions with potential political repercussions, the report will suffer the same fate as that of the earlier one by L.B. Jha,” said an industry observer.