UK government could cut back outsourcing to India

A 600-million-pound contract won by Tata Consultancy Services from Britain's Personal Accounts Delivery Authority has come under renewed media scrutiny.

This was after the new coalition government's chancellor George Osborne said on Tuesday all major expenses approved by the former Labour government after January 1 would be reviewed.

No contract was named in this regard. However, speculation began on this one. More details of the cost cuts the new government proposes will emerge in the following weeks.

Media reports also hinted that British Prime Minister David Cameron-led government in the United Kingdom is likely to review five more such outsourcing contracts.

Osborne and his team are hoping to cut expenses worth 6 billion a year. The new government is to also present an emergency budget on June 22.

In March this year, the UK's pension manager, Pada, had awarded the 600 million deal to TCS as the only remaining vendor who had bid for this contract, after other bidders withdrew.

Both Pada and TCS refused to comment on the outcome of a possible review. A TCS spokesperson in India said, "We, just like Pada, are also under an obligation to not comment on any speculation."

Pada released the contract to TCS in two parts - the designing and implementation part. The designing part is to end this October. The 10-year implementation part starts after that, subject to a go-ahead.