Prime Minister of India - Dr. Manmohan Singh

PM launches E-Governance Project MCA21

I am delighted to be here today to launch the e-governance initiative of the Ministry of Company Affairs, MCA21. This initiative is a major step forward and a milestone in simplifying the way Government functions and delivers services to citizens. I compliment all those associated with this project for having conceived, designed and executed this project in a systematic and time-bound manner.

Ladies and Gentlemen,

The National Common Minimum Programme recognised the possibilities offered by technology to ease the interface between Government & people and Government & business. The NCMP commits the Government to introducing e-governance on a massive scale, to simplify procedures, to make government citizen friendly and reduce the burden of Inspector Raj. In pursuance of this commitment, our Government has formulated a National e-Governance Plan.

In implementing this e-Governance Plan, I see a major role for public private partnerships, partnerships as seen in this project. Indian companies have played a key role in the evolving e-economy and e-business across the globe. Our professionals in the Information Technology business have given India a new image in the world. However, while we are e-enabling global businesses, we have not done enough to e-enable domestic business and even less so, the Government. The new technologies that we have mastered can make Government more transparent and simple and less intimidating to the common man and to our firms. They can also make Indian business more globally competitive.

Ladies and Gentlemen,

The institutional arrangements and processes to support the acceleration of growth are not yet fully in place. As we grow from an economy which is a few hundred billion dollars in size to one which is over a trillion dollars - and this is possible within the next few years - current institutional structures, current ways of functioning, current ways of managing information and paper and current regulatory practices will come under immense work pressure. There will be a manifold increase in the number of commercial organisations and transactions. We need to evolve to meet these pressures.

I do recognise, for example, the problems associated with paper-based manual filing systems in dealing with an increasingly paper-less regime in trade and business. Electronic information systems overcome the constraint of time and space imposed by the finite nature of manually operated systems. This is more so in the case of a country of continental dimensions like our. It is expensive to have a representative office of each central organisation in every capital of the country. However, through the use of internet, we can have "virtual offices" across the length and breadth of the country. Technology offers infinite possibilities in terms of providing "anytime - anywhere" transparent and accessible services.

Ladies and Gentlemen,

The MCA 21 is an excellent example of the kind of initiatives that are needed to enable our nation to meet the challenges of a rapidly growing economy. From less than 30,000 companies fifty years ago, the number of companies is now more than 700,000. Of these, more than 500,000 have been formed in the last 15 years.

As an organisation responsible for maintaining a wide range of statutory information of companies, the Ministry of Company Affairs is a classic example of an organisation faced with explosive growth in its work. I am happy that the Ministry has conceived and executed the MCA 21 project which enables it to meet the challenges of the future. Our Government has given primacy to the MCA-21 modernisation and computerisation programme and included it among the flagship Mission Mode Projects under the National e-Governance Plan. I am also happy that the launch of MCA-21 also marks the launch of the first Mission Mode Project under the National e-Governance Plan.

Ladies and Gentlemen,

I understand that the MCA-21 initiative covers comprehensively the services provided by the Ministry of Company Affairs to the corporate sector and the corporate sector should benefit through a hassle free and efficient interface with the Government.

I hope this initiative will bring in greater transparency into the functioning of the Ministry and the agencies under it.I also believe that banks and financial institutions should benefit from online availability of information relating to companies. They could take advantage of this information in improving their credit evaluation procedures and the overall quality of credit extended. The financial sector should explore the possibility of standardising formats to enable secure interaction between banks and the Government. I also urge the Ministry to build an archive of valuable data related to the corporate sector. The Ministry should create appropriate institutional mechanisms and knowledge resources to use this data archive and generate reliable statistics pertaining to the corporate sector. This will be useful for investors, financial institutions, Government and researchers and analysts.

I have been informed that the project provides for cross-referencing of financial statements of companies filed with the Registrar of companies and other regulatory institutions like tax authorities, RBI and SEBI.This will be a one-stop filing window. It will enable companies to file just once for all government-related purposes. Through e-enabling such services the Government can use technology to facilitate creation of single windows. This will make business easier for business, and governance easier for Government!

I urge all Ministries and Departments dealing with the corporate sector to align their processes so that compliance can be made easy through integrated service delivery and re-engineered processes. The project should serve as a role model for this purpose.

Ladies and Gentlemen,

The change from paper processes to electronic filing would also require a change in the mindset of stakeholders. They need to adapt themselves to electronic processes to reap the full benefit of this initiative. I, therefore, call upon professional bodies and industry associations to play a proactive role in facilitating this change. The success of projects of this nature depend on the successful and smooth management of change, procedural, technological and cultural.

I see in the initiative the potential for reducing procedural difficulties, delays and costs that inhibit the potential of our small and medium enterprises. The increase in number of locations for interfacing with the Registrar of Companies from 20 to 53 physical front offices should directly reduce the costs associated with applying or filing information required under the statute. I hope the Ministry will speed up its plans for enabling outreach through virtual front offices. These offices should then be able to provide internet-based services at work and home of potential clients.

Ladies and Gentlemen,

If we have to capitalise on the unprecedented growth opportunities that lie before us, we need to constantly revise and evolve our institutional structures, legal and regulatory frameworks and information transaction procedures. This project is one such example. I commend the Ministry for this effort. There is much more that needs to be done. Our government is committed to formulating a comprehensive new company law and work on the report of the Irani Committee has been completed.

We will be bringing a new bill to parliament in the next few weeks. This law will focus on promoting greater transparency and good governance in firms while at the same time giving them greater independence in operations. Such a law will be comprehensive revision of the fifty year old company law and bring us in alignment with current needs. We will also expedite the adoption of accounting standards in alignment with the International Accounting Standards so that we have better disclosure norms on par with global best practices.

I also request the Ministry to look into issues such as limited liability partnerships, etc. which are essential business structures in the emerging knowledge economy. The Ministry also needs to get the Competition Commission fully functional because an active competition body is an essential element in the architecture of a modern market economy.

Ladies and Gentlemen,

I take this opportunity to once again congratulate the Ministry of Company Affairs for embarking on this ambitious initiative. I convey my sincere appreciation to the team that has been working at various stages of the MCA-21 project. I compliment the organisations and the experts who have been instrumental in giving shape to this project and in ensuring its successful implementation.

Thank you.