Prime Minister John Key said the proposals are part of a restructuring that includes mergers of some government departments and layoffs in the public sector amid ongoing economic woes.
Key held two meetings with Google executives last year in New Zealand and at Google's California headquarters.
"We've had some people up there talking to them; I had some discussions when I was there and they showed us some technology we thought was pretty cool," he told Radio New Zealand.
"There is definitely in terms of their cloud technology the capacity to use that," he said.
The opposition Labor Party has protested what it calls arbitrary cost-cutting, saying it would not make public services any more efficient.
"It's about cutting numbers, it's about selling assets and putting that up as some sort of a plan to grow the economy" Labor leader David Shearer told Radio New Zealand.
"I think most New Zealanders will see right through it," he said.
Labor representative Chris Hipkins said the government should be looking for ways to make public services better.
"The idea that we could see regional offices closed and replaced with call centers in Mumbai will be abhorrent to many," he said. "We cannot afford to have our public services lose touch with the very people they are set up to help."