Government-corporate relation in India is all poised for all round transformation with the launch of MCA-21 at the behest of Ministry of Company Affairs. The project launched formally in mid March this year is seen as a mission 'niche' programme that has been identified as one of the major agents of change in governance in India. Once in place the Web enabled transactional window is all set to revolutionize the relation between Ministry of Company Affairs and the corporate world. This would change the entire corporate dealings in India. In addition the project is considered as a learning experience for the Government and private partners to deal with incoming transactional challenges. By now the project has spread its network nationwide across 20 offices of the registrar of companies, including New Delhi, Mumbai, Chennai, Bangalore, Kolkata, and Hyderabad.

The Transaction Load
The widely perceived view is the growing size of the Indian economy is exerting institutional pressures and challenges in dealing with increasing transactions involving the corporate entities. That with the gradual economic reforms process, the Ministry of Company Affairs appeared to be less than equipped in terms of institutional arrangements and processes to support the growth of the economy. There was no technology-enabled solution so far to ease the work pressure as well as streamline conventional paper based working
system.

"This initiative is a major step forward and an important milestone in simplifying the way government functions and delivers services to our citizens" -Prime Minister Dr Manmahon Singh, while launching the MCA-21 Project in New Delhi on March 18, 2006

In terms of capacity, the burden appeared to be awesome. The number of organizations registered with RoCs and MCA head office and Regional offices of MCA has seen upward trend in recent years with increasing number of transactions in terms of registration, fillings, and billings and so on. The number of companies in India stands at over 700,000. Among these, more than 500,000 have been constituted in the last 12-15 years and the figure is going to escalate further. With this the cobweb of transactions and activities have increased many folds.

MCA Challenges

• The number of companies in India stands at over 700,000

• Workload has escalated with this

• Manual and paper system being pressurized to deal with heavy workloads

• More consumption of time and space

• Wide scope for circumspection, red tapism and corruption

The MCA-21 Intervention
Then came the MCA 21 program, a web enabled e-filling, billing system. Several advantages have been cited with the new system over the old one.

Advocates of e-transactions view this electronic information and transaction system to cut upon the hurdles of space and time. It would fill the loopholes of circumspection and red tape imposed by the finite nature of manually and paper operated systems. It would reduce the costs incurred in nationwide trade and official trade transactions through creating virtual offices courtesy the Web medium. The services of back and front offices are fundamental in the entire process.

Salient Features

• No longer would it require visiting the regional Registrar of Company Offices by various Corporations, professionals and the public and instead they can interact with the MCA offices via the nationwide portal from anywhere, anytime or through facilitation centers.

• Multiple options are made available for users for payments of bills, fee etc especially online either through credit cards or availing Internet banking facilities. Besides this, the traditional payment through demand draft would be accepted against a system-generated challan at more than 200 bank branches across the country.

• The concept of Director Identification Number (DIN) has been introduced, that is a unique and lifetime identification number issued to all current and prospective directors. The ministry has made it mandatory for all directors who wish to interact with the ministry in future to acquire a DIN.

• Users and stakeholders need to take recourse to a Service Request Number (SRN) to enable them to track any service request.

• Electronic submission of forms has been facilitated, for which a unique Digital Signature Certificate (DSC) is required. It has been mandatory for all the stakeholders/users who would interact with the ministry to have a DSC. In the absence of DSC it would not be possible to file the returns and other statutory compliance related filings.

• The system has been secured well and a lot of redundancies built inside to make sure that the services are continuously available in a 24x7 time frame.

• A separate and full functionality disaster recovery system being implemented along with the primary data center to deal with any contingencies. In event of a man-made or a natural disaster, the system would switch over to the disaster recovery set-up within 12 hours.

• New e-forms to be notified for firms and companies.

• The Corporate Identification Number (CIN) is a prerequisite for e-filing.

• Provisions for cross-referencing of financial statements of companies.

• A one-stop filing window has been created for companies/ corporate bodies and firms to file just once for all government-related purposes and commitments.

• Number of locations for interfacing with the Registrar of Companies has been enhanced through more physical front offices.

• Every authorized signatory and practicing professional need to obtain digital signature certificates.

A Public-Private Partnership Model
One of the highlights of this e-Governance plan is the major role for public private partnerships. This is one instance of partnership emerging out of necessity to meet the pressures of a rapidly expanding economy. Tata Conslutancy Services (TCS) is the chosen operator of the project whose prime responsibility shall be to provide assistance for a further period of six years to sustain adequate levels of performance of the project. The BOOT (Build, Operate, Own and Transfer) model is the partnership chord between the Ministry of Company Affairs and TCS.

A variety of multiple organizations are also supporting the implementation of the project with assigned specific responsibilities. National Institute for Smart Government along with UTI Technology Services will look into the overall implementation of the project while Satyam Computer Services will help in the transition of employees to the new e-enable environment. Overall the project is expected to set the tone for similar ventures at both the national and state level.

Single Window Clearance
Through e-enabling of various services, the project is poised to facilitate creation of single windows for clearance of projects and schemes, and evaluation of the same. This way business could be made easier for business and governance easier for the government/s. With the corporate sector soon to align with the new process more closely, compliance to relevant norms and procedures will be made easier and faster through integrated service delivery and reengineered existing processes. While enabling a one-stop filing window the project will enable companies and corporate bodies and firms to file just once for all government-related purposes and commitments.

Transparency and efficiency are seen as the twin hallmarks of the project. Add to this, the project is sure to make Indian business more competitive globally.

The project will aid to overcome the representational problem along with the huge costs of structures and manpower arising out of huge transactions by providing "anytime-anywhere" solution to the manual and paper based problems of transaction and information procedures. All the business processes and services of the office of Registrar of Companies are made available on the e-Governance Mode. These services can be accessed only through the MCA portal.

Commenting on the landmark project, Komal Anand, secretary, Ministry of Company Affairs said, "The MCA-21 project is the largest full-scale deployment of Information Technology, in the shortest possible time frame, and will revolutionize the way India Inc interfaces with the government." She added, the MCA-21 program will bring about a service transformation in terms of ease of use and is slated to be a benchmark e-Governance project in the country.

Banks and financial institutions will benefit extensively from online availability of information relating to companies. They can avail the advantages of this information in improving credit evaluation procedures and the quality of credit extended to the corporate sector and the like. Further, the project will provide the facility to provide for cross-referencing of financial statements of companies filed with the registrar of companies and other regulatory institutions like tax authorities, RBI and SEBI.

A Data Hub
MCA-21 promoters view the project will open a new vista of information on the corporate India connecting up to around seven lakh entities. No doubt the data archives shall enable to generate reliable statistics, records and trends, enabling thereby better policy formulation and implementation. IT savours view MCA-21 set to poise to transform the entire edifice of the non-descript Company Affairs Department, an inefficient monolith into a full ministry, with wholesome attention on four basic constituents-companies, regulators, investors and intermediaries vis-à-vis addressing their issues.

A Difficult Path
Several issues have been identified that have the triggering potential to set trouble for MCA-21 and its implementation across the board. The success of projects of this nature depends on the successful and smooth management of change, procedural, technological and cultural change.

Getting into the working mode with the new system especially filling up e-forms, using digital signatures, dealing with Director Identification Number (DIN), Corporate Identification Number (CIN) shall create all the initial troubles with many. For instance, to get a DIN shall not be easy. The database of directors of all companies is presently being processed only at Noida (Uttar Pradesh) without any other alternate route.

The success depends on speeding up plans to enable outreach through virtual front offices that are being created under the project. Also these offices should be in a position to provide internet-based services at work and home of potential Clients.

Another challenge is scanning and digitization of such a large volume of documents (60 mn company documents). This task is time and schedule demanding in order to complete this in a timely manner.

To effect the changes from paper works to electronic transactions needs a transformation in the mindsets of those who will be handling the project. Adaptation to the new mode of operation and transactions based on electronic processes is quintessential to reap the multiple benefits associated with MCA-21. Other issues include identifying and earmarking space for setting up scanning stations close to the record rooms at each of the RoC offices, weeding out records, preparing record files, segregating documents to be scanned, preparing an index of the same, restoring documents into the company files and so on.

-Syed S Kazi
The author is an ICT4D consultant

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