E-Governance helps make Corporate Affairs a Paperless Affair !

Inputs from the Ministry of Company Affairs

With the galloping Indian economy and the strides being made by the corporate sector, the existing governmental work transaction structure is not in sync with the times. Being more than a century old the existing system is characterized by large amounts of paper work, time consuming processes and complicated set of controls. This legacy framework has come under immense pressure in the globalised context, necessitating creation of a favorable climate for encouraging sustainable economic growth and maintaining a healthy business eco-system. Institutional arrangements and processes necessary to support accelerated growth are needed to be put in place.

It is particularly relevant to the country’s corporate sector, which has registered a four-fold growth in the number of companies from about 200,000 in 1990 to over 8 lakh as of today. The Ministry of Corporate Affairs (MCA) has the only authentic information repository on the corporate sector and serves as the registry for all filings / public records.

Flagship of Transformational Change
The possibilities offered by technology to simplify the interfaces between the Government and the stakeholders have been effectively adopted to address this challenge. Towards this end the Ministry of Corporate Affairs has embarked upon an ambitious e-Governance project called the MCA21 e-Governance Program. It aims at continuously repositioning MCA as an organization capable of fulfilling the aspirations of its stakeholders in a globally competitive business environment. The comprehensive, end-to-end service oriented solution has helped establish a fine balance between facilitation and compliance – as a blend of well-defined goals and performance metrics.

Demonstrable Stakeholder Values
MCA21 is an outcome-oriented initiative and the objectives of the program are to address the concerns of all the major stakeholders:
 Business: enabled to register a company and file statutory documents quickly and easily and in a convenient manner;
 Public: to get easy access to corporate 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;
 Government: to ensure proactive and effective compliance of relevant laws, corporate governance and transparency;
 MCA Employees: enabled to deliver best of breed services to all the stakeholders in a speedy and transparent manner.

100 MCA Services covered
About 100 citizen-facing services are covered within the scope of this project. Service categories include:
 Name approval & Incorporation of new companies;
 Filing of Annual Statutory Returns;
 Filing of forms for change of names/address/Director’s details;
 Creation/ Modification/ Satisfaction and verification of charges;
 Various other statutory filings required under the Companies Act;
 Inspection of public records;
 Providing a forum to redress investors’ grievances.

Big Bang Strategy
Given the unique nature of requirements and the outcomes targeted, a ‘big-bang’ strategy was adopted to migrate to a near complete paperless system. A hybrid system would have only added to complexities of reconciling paper and electronic transactions. The back office operations have been made completely paperless (with the exception of stamp papers) with the use of electronic workflows and secure digital document repositories. No other similar solution implemented elsewhere in the world has made such a massive transition within a seven month period like what has been achieved in MCA21.

A unique Project
MCA21 is a departure from the conventional ‘computerization’ approach involving procurement of infrastructure and project related services. Instead, it has adopted a ‘service delivery’ model where the project operator would provide the desired service facilitation through a clearly agreed service level agreement. Financial and legal structuring of the project has been carried out with the help of experts. MCA21 is the first project implemented through a Public-Private Partnership (PPP) wherein a consortium led by Tata Consultancy Services Ltd. represents the private sector.

The commercial approach involves a Build-Operate-Transfer (BOT) model that is based on the operation of a service driven technology solution. The project cost includes the costs towards software/solution development, digitization and data migration, implementation and change management, operation of the solution for a period of six years upon implementation. The payments to the operator are made on an equated quarterly basis of clearly defined service level agreements (SLAs) to ensure effective service delivery. A system of incentives and penalties has been built in so as to enforce adherence to service levels by the Operator.

The MCA21 process involves extensive processes re-engineering to provide ethos with anywhere, anytime secure electronic filing of all statutory documents. Electronic workflows and sophisticated document management systems for processing service requests has enabled quicker service turnaround from the back office. Consequently all statutory forms have been revised and adopted for electronic filing. E-filing process has been implemented through freely available software, where there is no additional cost on end user.

50 MCA Facilitation centers (service provided free of cost) and about 1,000 Certified Filing Centres operated by practicing professionals (services provided for a nominal, prescribed fee) have been set up to address problems associated with ‘digital divide’.

Nearly 50 million pages of public records (legacy corporate paper documents in the registry) have been digitized for ready electronic access through Internet to the investors and general public.

MCA21 is the first project to be implemented through a Public-Private partnership and includes best-in-class computing infrastructure with facility to handle business continuity requirements.

Current Status
The Project was launched on 18th Feb. 2006 at Registrar Of Companies office at Coimbatore, the first pilot location, and a second major pilot was launched at ROC Delhi one month later. Progressive rollout was completed at all other ROC offices in the country by 4th Sept. 2006, almost co-terminus with the mandating of electronic filing from 16th Sept. 2006 enabled through the amendments introduced in the Companies Act, 1956.

Subsequently, the MCA21 system has been serving as the operational backbone to the process of MCA service delivery at the ROC offices. An average of 1.7 million portal hits per day is registered and about 34 lakh documents have been filed electronically so far. About 85,000 new companies have been registered using the newly introduced secure electronic services and 5 lakh users have viewed company documents online from the registry. During the peak season when annual statutory documents are submitted (September to December each year), the maximum filings registered in a given day has touched 41,800. Approximately, 85% of all filings are done directly at the MCA portal while the balance is filed through facilitation centres (both MCA established and those established by practicing professionals).

Banks play a key role in collection of the MCA payments. Reporting of the collections to MCA is critical in the service turnaround to the stakeholder. 97% of the payment realization and reporting has been achieved within T + 3 days. About 48% of the transactions are being received using the on-line system of payment of statutory fees.

Best Practices
Despite its size and complexity, MCA21 e-Governance Project has been accomplished within a very aggressive timeframe. The implementation benchmarks can be compared to some of the best efficiencies achieved in the private sector enterprises. Some of the key factors that have contributed to such high levels of project efficiency are (i) establishing a sound conceptual framework and comprehensive documentation including the RFP and supporting technical data (ii) ability to adhere to project timelines and not allowing any scope creep, though there were delays in obtaining the concept and budgetary approvals.

MCA21 e-Governance project was initiated after a very careful assessment of the environment to ensure the successful adoption of the ICT solution. It is based on a holistic services outsourcing model as opposed to procurement and integration of solution components. This is a significant departure from the conventional project approach that is generally adopted in ICT initiatives, where there is a clear shift from a capital intensive investment model to one that is a Build-Operate-Transfer model where payments to the Operator are made on an equated quarterly basis based on adherence to a set of contractually enforced service level agreements that broadly cover project outcomes, service times, business continuity and technical parameters governing performance and service uptime. In short, the MCA21 project has been treated on par with any other core infrastructure initiative with a sustainable mechanism to ensure its performance.

Awards & Recognition
MCA21 e-Governance Program is envisioned to catalyze the way corporate India interfaces with the Government. Aimed at bringing about a service transformation through a harmonious blend of facilitation and compliance, it is considered a benchmark among e-governance projects in India, involving large-scale deployment of information technology within the shortest possible timeframe. This is perhaps the first green project that has successfully cut down large scale usage of paper.

Considered as a flagship project under the National e-Governance Plan, MCA21 has evolved to prove that how the finite nature of paper based systems could be overcome especially in a country with continental dimensions like India. Recognized as ‘a revolutionary step by the Government in the right direction’ by 92% of CEO/CFOs surveyed by Ernst & Young / CNBC TV, the project has been conferred numerous recognitions and awards including the ‘IT Pathbreaker Award 2006’ by the Dataquest Magazine, ‘Excellence in e-Governance Implementation’ at Technology Sabha, 2008 organized by the Indian Express Newspaper Group and TATA Indicom, ‘Golden Icon’ National Award for “Excellence in Government Process Reengineering” for 2007 by the Department of Administrative Reforms & Public Grievances and “Skoch Challenger Award 2008” for “Project of National Significance”.