Précis on MCA Version 3.0 | Artificial intelligence and Analytics By Mehul Solanki and Devyani Bhati


Introduction

Amid the global pandemic and the synchronised recession prevalent in the current scenario the highly anticipated Budget (popularly addressed as “Once in a century budget”) for the Fiscal year 2021-2022 was delivered on February 01, 2021 by the Hon’ble Finance Minister Nirmala Sitharaman. This year being the year of having an adaptive approach, the budget was introduced through online mode and making the same available to the general public via an application dedicated for the dissemination of the same and discontinuing the age-old tradition of carrying the bulky papers in the Parliament for the purpose of the speech.

The budget focused on six cornerstones with a vision for Atmanirbhar Bharat namely:

  • Health and wellbeing;
  • Physical and Financial Capital and Infrastructure;
  • Inclusive development for Aspirational India;
  • Reinvigorating Human Capital;
  • Innovation and R&D;
  • Minimum Government and Maximum Governance

In order to facilitate the aforementioned cornerstones, the budget gave a lot of opportunities to the diaspora ranging from no negative consequences in the taxation regime to promotion of Ease of Doing Business. The Hon’ble Finance Minister also set forth the introduction of India’s First Mission Mode e-Governance Project: MCA 21 Version 3.0.

This artificial intelligence and machine learning supported version would primarily lay emphasis on the following subject matter:

  • Promote ease of doing business (EODB);
  • Strengthen enforcement;
  • Seamless integration;
  • Promote transparency;
  • Minimization of time required to undergo litigation;
  • Facilitation of faceless dispute resolution;
  • Automation of approvals wherever necessary;
  • Promotion of governance;
  • Minimizing the Government’s interference;
  • Data interchange between multiple Regulators.

The scope of MCA 21 Version 3.0 would include the following aspects:     

Automatic approval for incorporation applications/ Seamless Straight through process

The current version adopts the non-straight through process route for the purpose of incorporation of a company. The version would now facilitate the incorporation applications to undergo the automatic approval route subject of course to certain exceptional cases.

Real time grievance redressal mechanism

The grievance redressal mechanism would be revamped to now include dispute resolution via utilisation of chat bots, virtual assistants, automatic ticket categorization and speedy resolution of complaints. This would ensure saving of enormous time of the company including that of the Directors and officers of the Company. The time saved would let the officials focus more upon diversification of the business and alternate productive measures.

E-consultation

The e-consultation module would a platform to the public to provide their opinion on the proposed amendments and rules. The proposed amendments would be put forth for comments on digital platform. The system will also facilitate Artificial Intelligence driven sentiment analysis, categorization of stakeholders’ inputs and creation of reports based on the analysis and inputs. This would provide the Ministry with an industry perspective on the proposed amendment.

E-adjudication

Keeping in mind the ever-increasing pile of the litigation matters dealt by the Registrar of Companies (ROC) and Regional Director (RD) the concept of e-adjudication is introduced. It would provide an end to end online e-adjudication facility for the stakeholders and promote transparency. The digital hearings, appointments and processing of adjudication matters would further enhance the automation process.

Compliance Management System

To minimize the number of non-compliant companies and to keep a track of the same, is the subject matter where the Compliance management system plays the key role. The system would not only automatically identify the defaulting company but also issue e-notice to them thus facilitating the regulatory function of the Registrar of Companies (ROC). It would conduct a rule-based check on the registered companies. It would also provide the stakeholders with a platform to submit their responses through electronic mode.

E-scrutiny and Automated Identification and follow up actions

The Ministry of Corporate Affairs is under the process of establishing a Central Scrutiny Cell whose main function would be to keep a tab on the forms submitted under the Straight through process (STP) route and raise red flags that would subsequently be subject to in-depth scrutiny. This would now impose a diligent attitude on the company while filing various forms even under the Straight through process (STP) route.

Ministry of Corporate Affairs Lab

Ministry of Corporate Affairs Lab will constitute of corporate law experts. The primary function of the Lab will be to evaluate the effectiveness of Compliance Management System, e-consultation module, enforcement module, and suggest enhancements to the same on an on-going basis.

Convergence with Corporate Data Management

MCA 21 version 3.0 will ensure provision of Data Lake and on demand data extraction capability. Extraction of large volumes of data on demand would be facilitated by the same. Basic analytical capabilities for fast decision making would be ensured. Enhanced reporting & governance would be boosted due to the convergence with Corporate Data Management.

Timeline for the implementation the MCA 21 Version 3.0

Sr No.

Particulars

2019-20

2020-21

2021-22

2022-23

1

New version of MCA 21 system to be implemented and stabilised

 

 

 

Agency to be on boarded

 

Requirement finalization and pilot run

 

System with full capabilities implemented and stabilized across all offices

-

2

Development and operationalization of e-Adjudication Module

 

 

Requirement finalization

Software Development & Pilot run

 

Full scale Operationalization

 

Additional enhancements

 

3

Development and operationalization of public e-consultation Module

 

 

Requirement finalization

Software Development & Pilot run

 

Full scale Operationalization

 

Additional enhancements

 

4

Establishment of an Online “Compliance Monitoring System” based on Data Analytics of e-filings.

 

7 Sections to be covered

5 Sections to be covered

 

Stabilization

 

-

5

Random Sample check of Straight Through Process (STP) SRNs filed during 2019-20.

 

Milestones

Preparatory Steps & 3 e-forms

5 e-forms

Expansion of Coverage and Stabilization

6

Reports on Corporate Sector Functioning.

 

2

4

6

-

7

Deployment and operationalization of Compliance Management System (CMS) Module

 

Requirement finalization

Software Development and Operationalization

Additional enhancements

-

8

Deployment of Data Analytical Capabilities in MCA21 version 3.0

 

Requirement finalization

Requirement finalization and pilot run

Implementation and Operationalization across all field offices

-

Conclusion

The rise in the corporate frauds and consequently with a motive to ensure a transparent environment, the Government has adopted the MCA Version 3.0 model. The introduction of seamless straight through process, Real time grievance redressal mechanism, e-consultation, e-adjudication, Compliance Management System, e-scrutiny and automated identification and follow up actions would thus ensure the achievement of the ultimate goal of the model. This would not only ensure the transparent environment but would also ease out the cumbersome process one has to undergo while dealing with Government agencies.

Bibliography

http://www.mca.gov.in/Ministry/pdf/VisionDocument_03032020.pdf

https://www.financialexpress.com/industry/technology/govt-to-launch-ai-driven-mca-portal-in-fy22/2188945/

                           

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