KNOW YOUR

MCA 21

MCA 21

NEWSLETTER

(Reproduced from the website of Ministry of Company Affairs)

Government of India
Ministry of Company Affairs
Shastri Bhawan, New Delhi

Dear Colleague,

I am happy to announce the launch of MCA21 Project, the e-Governance initiative of the Ministry of Company Affairs (MCA). This is a flagship e-Governance Project of the Government of India, covering the core services of the Ministry. The contract agreements have been formalized with the selected operator, M/s Tata Consultancy Services Limited (TCS) as on 1st March 2005. The project is expected to be implemented in 60 weeks across all MCA locations. TCS will provide support for a further period of 6 years to sustain adequate levels of performance.

The project has been designed to be implemented in the shortest possible time frame. In order to minimize the typical risks involved in successful execution of a large and complex project like this, the implementation will be done in two phases:

Phase I: Implementation of the project at the Headquarters at Shastri Bhawan - New Delhi, ROC Delhi, ROC Coimbatore, RD Kanpur and RD Chennai by December 2005;

Phase II: Fully functional system covering all MCA locations country-wide, to be put into operation by April 2006.

The project is visionary in nature and is aimed at repositioning the Ministry as a dynamic and modern organization, capable of fulfilling the aspirations of stakeholders in the 21st century.

As a result of this, you will enjoy the benefits of working in a modern office environment with access to the best in class information technology solution that will help you execute your responsibilities efficiently.

Multiple organizations with specific responsibilities are supporting the implementation of the project. National Institute for Smart Government (NISG) along with UTI Technology Services Limited (UTITSL) will oversee the implementation of the project. Satyam Computer Services Ltd. will provide facilitation to all employees to easily adapt to the changes in the working environment in the new paradigm.

Highlights of the new work environment

 A less paper Office: All the records, which currently occupy a large amount of space in your offices, would be scanned and saved as electronic documents. These will be available to you through the computer system, without the difficulty of accessing paper records. About 6 crore pages of company documents will be digitized in this way and stored into the computer system initially.

The following categories of documents will be digitized:

• Permanent documents like Memorandum of Association, Articles of Association, Certificate of Incorporation, Form 5, Form 18, Form 21, Form 23 A, Form 37 and Form 39.
  
  
• Routine mandatory documents like annual returns, balance sheets and charge documents. Consequently, Annual reports of 2003-04 and 2004-05 are also expected to be scanned into the system.

Scanning and digitization of such a large volume of documents is only possible with your active involvement and consistent proactive support. I am aware that this is going to be a very demanding time and schedule for each one of you, but I am also confident that you all will wholeheartedly participate to complete this in a timely manner and make this a success.

At each of the ROC offices, you will have to take a number of steps including

•  Identify and earmark space for setting up scanning stations close to the record rooms.
  
  
  • Weeding out records
  • Preparing record files
    
    
• Segregating the documents to be scanned and preparing an Index, for handing over to the TCS staff, and
  
  
  • Restoring the documents into the company files.

TCS personnel would be working in two shifts. Keeping in view the time constraints, I am confident that you will be prepared to match their performance.

Automation of Operations: TCS is developing the software for this project covering both filing of forms as well as establishment functions. The software will enable online filing of documents by companies and automate the work of MCA. It will also automate various internal establishment-related functions like, service records, leave and travel request, and finance & budget related functions. We would need to ensure accurate data for both the core functions and establishment matters and this would of utmost importance and I request all of you to proactively support data management tasks. It is to be particularly noted that ensuring the accuracy of this data will be the responsibility of the Ministry. 

IT Infrastructure: As a part of the project, TCS will provide IT infrastructure like computers, printers, scanners and other peripherals to all the field offices. I join you in looking forward to the day when each one of us will have a PC on our tables. While each field office will have a computer server room, the primary data center will be located at Delhi. This will serve as the hub for all data processing. Towards contingency planning,

Disaster Recovery Center will be located at Chennai with a readiness to restart full operations within 12 hours of a natural or man-made disaster.

Non IT Infrastructure: For the initial three years of the project, Physical Front Offices/ service centers (PFO) would be set–up by the operator to facilitate companies to do business transactions with the Ministry online. A total of 53 such locations would be established across the country. Let me clarify that the setting up of Physical Front Offices is a mechanism to ensure that the crowding of people during the peak-filing season is avoided at the RoC offices. These centers will serve as facilitation centers to receive the documents, convert them into electronic documents, and transfer the same in digital form to the back office (RoC office) for further processing and decision-making. The Ministry’s work will become easier and more efficient.

Training: A training schedule for working in the e-Governance framework has been planned and would be communicated to each of the RoC offices very shortly.

It will be ensured that each one of you is trained adequately to be able to operate the new system efficiently.

It is needless to say that the project will make a tremendous difference in the way the Ministry will function in the future. We are all equal stakeholders in this project and such project can only succeed with active participation and contribution from all employees of the Ministry. Through collective effort, we have to ensure that the project succeeds. Ministry would provide training and refresher programme on the project through TCS and would also train you to manage the change through Satyam computer Services Ltd. We are currently working on a scheme of recognition of the employees who excel in their contribution in making MCA21 a success. This scheme will be shared with you through the next issue of the newsletter. We would continue to issue monthly newsletters to update you on the progress of the project and also to answer questions, if any, on the project. Should you have any queries in your mind, feel free to make a reference to the e-Governance cell by email oandm.dca@sb.nic.in.

Let us endeavor now to collectively work towards the success of MCA21 and demonstrate to the world, the change in work environment is our commitment.

With Best Wishes,

Yours Sincerely,

KOMAL ANAND

Secretary to the Government of India

Secure Electronic Filing: MCA 21 Program - A Case Study

Y. S. Malik, Joint Secretary, Ministry of Company Affairs ; R. Sumanthra Consultant, MCA21 program and Ms. Renu Budhiraja, Director, Department of Information Technology.

Reproduced from the August 2005 issue of the Chartered Secretary)

MCA21 Project (previously christened DCA21) - A Recap

In the context of a globalising world, it is important that Indian industry remains in the reckoning in a competitive environment. Therefore, the regulatory framework must facilitate compliance of rules at a minimum cost and with convenience to the stakeholder. MCA21 is founded on the Government’s vision to build a healthy business eco system and make the country globally competitive.

MCA21 is an innovative eGovernance initiative that aims at continuously repositioning Ministry of Company Affairs (MCA) as an organization capable of fulfilling the aspirations of its stakeholders in the 21st century. For any program to be outcome-based, a paradigm shift in the service delivery is inevitable. A Service Centric Approach by the Government is the principal driving factor to the transformation.

The bottom line of this unique initiative is the improved speed and certainty in the delivery of MCA services. This improvement is primarily enabled through the mechanism of electronic Filing (e-Filing) for the services and back office automation by harnessing the right technology enablers.

Project Progress[1]

The MCA21 project was formally awarded to a consortium of TCS Ltd. and CMC Ltd. on 1st March, 2005 on the basis of an open bid process. It is expected that by the end of the year 2005, pilots will be launched at both Delhi and Coimbatore and by mid-2006 the nation wide roll out of the project will be completed. This would mean that by mid next year, any of the transactions with the RoC, with the exception of the functions related to the Official Liquidator (OL) can be carried out electronically. Besides the solution development, the process of digitization of the company’s legacy records has also been commenced.

e-Filing

e-Filing or electronic filing is a key feature of the MCA21 system. The major benefits that accrue due to e-filing are the ease of interaction with all citizens and a near paper-less back office operation at MCA that will significantly improve the speed of back office work. Of course a small amount of paper will still need to be maintained, but the bulk of the operations will be paperless once the system becomes operational. While it shortens the cycle time for MCA service delivery, it also provides transparency to the entire operation.

There has been significant thinking, study and discussion that has gone into the formulation of the e-Filing process. The process of e-filing will work as follows :

• Download a blank e-form from the MCA21 portal.
• Fill-up the e-form offline using software that is free and widely available.
• Optionally carry out electronic pre-scrutiny - in which the system will verify whether the form has been completed in all respects, though the system will not be able to intelligently judge the quality of contents.
• Digitally sign the form - by one or more signatories (please see information regarding digital signatures in a separate column).
• Submit the e-form (duly filled and digitally signed) for processing to the MCA21 portal.
• Make necessary payments to complete the transaction - either at an authorized bank branch or through a credit card or through the Internet Banking facility.

The electronic documents that are submitted to the MCA21 portal will be taken up for processing by the concerned RoC as soon as payment authorization has been received from the authorized bank. Needless to say, that in the case of payments made using credit card these are almost instantaneous. If payments are not made within a week from the date of submission to the MCA21 portal, the documents/e-forms will need to be re-submitted once again.

MCA Payments

For the purpose of collection of payments more than 200 branches in all major cities and towns of the following five Banks have been authorized:

• State Bank of India
• Punjab National Bank
• Indian Bank
• ICICI Bank
• HDFC Bank

At the time of submitting the form at the MCA21 portal, the system will provide a pre-filled bank challan that can be printed out by the applicant. Using these challans a teller payment is made at one of the authorized bank branches convenient to the applicant. Upon completion of the MCA payment, the electronic documents are authorized for processing by the banks on the day following the payment. These authorizations are provided electronically through highly secure processes. In the case of credit cards the authorization to the MCA21 system is instantaneous.

Back Office Operations

The MCA back office efficiencies that brings about speed and certainty in the delivery of services are enabled through the concepts of electronic documents incorporated in automated workflows. The workflows for the bulk of the services are pretty much standardized and provide adequate system features for monitoring and control. As a result, the electronic documents move quickly from one desk to another and after completion of processing, finally reaches the electronic document repository. As the documents build up in the digital archive and there is a progressive reduction in the dependence on physical paper documents for RoC processing, predictability in service efficiencies can be achieved. It is possible, in the envisaged scenario for public to have access, for instance, to the charge documents within a day of its being filed as part of the inspection of company’s documents.

Citizen Facilitation

When implementing a sophisticated ICT based solution such as the MCA21 solution, citizen facilitation becomes critical to ensure the success of the system. It especially becomes very relevant in the Indian context where the ‘digital divide’ is very steep, to address the needs of the stakeholders who do not have access to a computer system, an Internet connection and those who are not adept in using computerized applications. In order to address this, a wide network of Physical Front Offices (PFO) will be established. These will be conveniently located at all Metros, major cities/towns and in Special Economic Zones.

Citizens will, thus, have the choice to do electronic filing either directly at the MCA21 portal or seek the services of a PFO. This would eliminate the arduous task of the citizen physically going to a RoC or other offices of MCA to complete a transaction. More importantly, the transaction can be carried out from any location as physical boundaries have been eliminated - for instance a company with its corporate office at Bangalore and its registered office at Kolkata can conveniently choose to file from a PFO that is located at Bangalore or for that matter any other part of the country.

Processing Hub

A National Data Centre at Delhi and a Disaster Recovery Centre at Chennai will be established to exclusively support uninterrupted 24 x 7 operation of the MCA21 system. The solution also provides for a high bandwidth nationwide connectivity across all offices of MCA and facility to allow access to several thousand users at the same time, whether it is for citizen or back office access.

Public Inspection of Documents

Another key feature of the MCA21 system is the online viewing of documents of RoC by anyone desirous of inspecting these documents. In order to make this possible, nearly six crore sheets of existing documents will be scanned into the system. The company’s permanent documents, most recent annual report and subsisting charge documents will be scanned as digital documents, authenticated by a competent authority of MCA using a digital signature and made available to the viewers. When the system goes live, the records of any company can be viewed from anywhere through the Internet on payment of the necessary RoC fees. However, it will be limited to only those documents that are currently in the possession of the RoC files. But the repository will progressively build up with the new electronic documents that will be filed by companies and within a few years the electronic repository is expected to have rich contents. Citizens can also request certified copies online as part of the proposed solution.

Enabling Factors 

Adaptation of MCA forms for electronic filing

The services of MCA are all form driven. The biggest challenge was to adapt the paper forms in a manner that is amenable for electronic filing. This had to be done within the framework of the Companies Act, 1956. The forms re-engineering exercise was carried out with the participation of domain specialists so as to make these forms ready for electronic filing. Each form was meticulously analyzed and redundancies eliminated. In some cases, where feasible, the forms themselves were unified/eliminated so that the number of forms has come down by about a third. These can be further fine tuned with inputs from industry and professionals once the e-filing starts.

Usability Issues

Form filling will be done using freely downloadable software and it can be done offline, i.e., one need not remain connected to the Internet while filling-in the form. Such an approach ideally suits use of home and small office Internet connections. Form sizes have also been kept in mind and the form sizes have been kept to reasonable limits that will not impinge on response time, though in some very exceptional cases these are slightly high.

Back office

Lot of attention has been paid to the simplification of key back office operational steps as part of the process re-engineering exercise that was carried out by a team of experts. The back office will have a rich collection of data elements that will be retained in a Relational Database Management System. This transfer of data from the e-forms to the relational database management system is being done using technology components, obviating the need for any manual data entry - consequently the purity of data is retained, as the data entered by the applicant on the form gets transferred automatically into the system for further use.

Change Interventions

It is one thing to write a vision document ; it is another to convey it in a multitude of ways, in which the stakeholders can draw a personal meaning from them. It is all the more important for the MCA employees, who are at the forefront of change. Accordingly, change management interventions - that  manage the perception from conceptualization to rollout- have been an integral part of the program from day one. The approach has been uniquely designed to proactively manage this change, using a series of training programs and workshops at various levels of the organization. To help employees adapt to the new work culture, the offices are being modernized to be on par with the best in Indian corporate sector.

Challenges

While making a big leap into the digital era from a classic paper based system, it is only but necessary to introduce a system so complex and such an exercise is not without its challenges. There are certain issues that still need to be innovatively addressed - Stamp duty is one such issue. The new amendments made in the Stamp Act are expected to help address this with use of appropriate technology. Ministry is making efforts in seeking a resolution of this aspect before MCA21 system operation with all concerned States and agencies.

The induction of a large number of Banks authorized to collect MCA payments and acknowledge the same in a timely manner into the MCA21 system is another challenge. The participating Banks will acknowledge MCA collections through electronic means within a day and this would need adapting their core banking software applications to include the acknowledgement facility. The standardization that needs to be achieved and the conformance by these Banks is a non-trivial exercise.

Digital signatures is another new area that needs to be tackled. Though digital signatures have been previously used for specific application such as Customs, this will be the first time when digital signatures will be used on such a large scale - by directors of companies, practising professionals, representatives of financial institutions besides MCA employees themselves. The process of issuance and renewal of digital signatures would have to be made easier.

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 and have been succinctly articulated as under :

  1.  Business enabled to register a company and file statutory documents quickly and easily.

  2.  Public to get easy access to relevant records and get their grievances redressed effectively.

  3.  Professionals to be able to offer efficient services to their client companies.

  4.  Financial Institutions to find registration and verification of charges easy.

  5.  MCA to ensure proactive & effective compliance of relevant laws and corporate governance.

  6.  Employees enabled to deliver best of breed services.

Conclusion

The MCA21 initiative is part of the “Mission Mode” projects 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 think along the roadmap and imbibe the learnings from the mission mode projects. The MCA21 program may be looked at as one of the early e-Governance building blocks capable of providing sustainable ethos to the several modernizing initiatives that will be carried out by the Government of India.

There are two distinct areas where knowledge and learnings can be taken from the MCA21 project - (a) a model for secure electronic filing and (b) a concept for improving Government Back office efficiency. It is needless to say that these two are critical ingredients that can be used in a plethora of situations involving delivery of citizen services by the Government. The experience gained from MCA21 can serve as a solid foundation not just for improving service delivery but help the Government think ‘out-of-the-box’ for innovating and defining new services.