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The Ministry of Company Affairs (MCA) is concerned with the administration of the legal framework governing corporate functioning including, inter-alia, the working and administration of the Companies Act, 1956. The Ministry operates through a three-tier organizational set-up, viz. the Secretariat at New Delhi, the Regional Directors (RDs) at Mumbai, Kolkata, Chennai and NOIDA and 20 offices of the Registrar of Companies (RoCs) located in various States and Union Territories.
Beginning with about 30,000 companies at work in 1956, the number of companies grew to 2.02 lakh in 1990 and further to 6.4 lakh as on 31.03.2004. An addition of more than four lakh companies during the last fifteen years is an indication of the growth of the corporate sector in the country. A liberalizing India and the emergence of new business models is bound to see the corporate sector growing very significantly during the coming years, especially in the context of a globalising world.
Such a phenomenal growth of the Corporate Sector calls for prompt and efficient delivery of services by MCA to be able to compete globally. It is important that Indian industry remains ahead of competition. Therefore, the regulatory framework must facilitate compliance of rules at a minimum cost and with convenience to the stakeholder. Conscious of its responsibility towards the Corporate Sector and to respond to the call of times, the MCA has taken two major initiatives to support the vision and sustain a healthy business eco system in the country. As a first step, the Ministry has embarked upon a comprehensive revision of the Company law so as to provide for the internationally accepted best practices in corporate governance, simultaneously, an ambitious e-Governance initiative “MCA21” has been launched with a view to introducing efficiency and transparency in service delivery. While the reform to the legislative framework is oriented towards simplifying and enhancing the relevance to the contemporary context, the e-Governance initiative enables adoption of a Service Centric transparent Approach as a principal driving factor to the transformation.
MCA21 is an innovative e-Governance initiative that aims at continuously repositioning the Ministry as an organization capable of fulfilling the aspirations of its stakeholders in the 21st century. Geared to provide anytime, anywhere services, the concept of efficient and friendly service delivery is achieved by harnessing the right technology enablers.
MCA Services
There are approximately 100 services provided by Ministry of Company Affairs. The major services categories are: Incorporation of new companies; Facilitation of annual statutory returns; Other statutory event based filings related to matters of Corporate Governance; Providing redressal forums for grievances of investors; Registry reference to public records to anyone in need of such information; Surveillance over the working of corporate sector; Providing legal framework and ensuring compliance; Formulation of policies governing the corporate sector
Beneficiaries
The focus of the MCA21 program is on bringing about a fine balance of the stakeholder requirements - between facilitation and control - as a blend of well-defined goals and performance metrics. Adopting International best practices, the goals have been set to bring immense value to the stakeholders & have been succinctly articulated as under: Business: enabled to register a company and file statutory documents quickly and easily, and in a manner that is convenient; Public: to get easy access to relevant records and get their grievances redressed effectively; Professionals: to be able to offer efficient services to their client companies; Financial Institutions: to find registration and verification of charges easy; MCA: to ensure proactive & effective compliance of relevant laws and corporate governance; Employees: enabled to deliver best of breed services.
Current Shortcomings
Ministry of Company Affairs has the most authentic information on the corporate sector of the country as it serves as the registry for all statutory filings. However, this has been a paper-based system that is localized in twenty RoC offices situated across the country. The companies submit these paper documents at the RoC where the registered office of the company is situated. The system that operates on physical paper is extremely slow and inefficient with additional constraint of RoC offices located in limited number of places.
Project over-view
The MCA21 Project implementation commenced with the signing of contract with the selected operator M/s Tata Consultancy Services Ltd. on 01.03.2005. The Project has an implementation cycle of 60 weeks and thereafter an operation period of 6 years.
Pilots will be launched at both Delhi and Coimbatore by end of 2005 and by mid-2006 the nation wide roll out of the project will be completed. Besides the solution development, the process of digitization of the companies legacy records has also commenced.
Salient Project Features
Introduction of anywhere, anytime secure electronic filing for MCA transactions. Adaptation of all statutory forms for electronic filing. Use of Digital Signatures to ensure the security of electronic forms and documents in conformance with the Information Technology Act, 2000. Convenient methods of payment that will encompass existing payment through an increased network of Banks/Branches along with electronic payment options using credit cards and Internet banking. Access to the services optimized for use from a typical home Internet connection. Back office of the Ministry to use best-in-class information technology solution that will include electronic workflows and sophisticated document storage and retrieval systems, with significant paper reduction. 53 of Physical Front Offices that will be located nationwide that will provide facilitation services for electronic filing. Nearly 6 crore pages of legacy corporate documents to be digitized for electronic access through Internet. Easy reporting of complaints by investors through MCA portal for easy and speedy redressal. Use of an architecture based approach for building the technology solution, that will allow easy adaptation of evolving technologies while providing the robustness and scalability to the solution. National Data Center to provide uninterrupted 24 x 7 operation. High bandwidth nationwide connectivity across all offices of MCA and facility to allow access to several thousand users at the same time. Disaster Recovery mechanisms with a facility to restart operations within half-day in the event of a natural or man-made disaster. Possibility of collecting stamp duty electronically. Ministry’s offices modernized to be on par with the best in Indian corporate sector. Adoption of a Build-Operate-Transfer model through Public-Private partnership to ensure sustained performance levels.
Change Management
MCA21 involves significant amount of change at all levels when translating vision into reality. The success will depend on how each stakeholder adapts to the new way of interacting based on the perceptions, expectations and the personal meaning that they have drawn from the system. It is all the more important for the MCA employees, who are at the forefront of change. Change management interventions have been an integral part of the program from day one so that there is a quick adaptation to the new work culture.
Conclusion
MCA21 is a pioneering initiative and has been adopted as a “Thrust Area” project of the Government of India. Such mission mode projects have been positioned to be major change agents in the e-Governance space in India. Government agencies and departments and even private entities, which want to play a role in e-Governance transformations, will all be catalyzed to work along the roadmap of the MCA21 project.
*Minister for Company Affairs
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