A Niche Program

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