After seven years of running and developing MCA21, the showpiece portal of the ministry of corporate affairs is down for nearly a month from 17th January after being handed over to Infosys, one of India’s most reputed corporate house. Why did this happen? How long will it remain down and out? Who is answerable to the people of India?

It was supposed to be a simple handover. On 16th January, Tanmoy Chakrabarty, the head of Government Industry Solutions at Tata Consultancy Services (TCS) told us, “There was a round of bidding after the first seven-year contract was ending. We lost to Infosys on the price front in the MCA 21-II and we have gone through the full transition. In fact, at the end of business day today we have handed over all systems to the ministry of corporate affairs (MCA) and Infosys Technologies”. He was generous enough to say, “It was a fantastic experience for all of us at TCS to have worked with the ministry in bringing about the transformation and we regret that we could not carry on the journey but we are sure that through the next contract the MCA 21-II will sustain and leap to greater heights based on the strong and robust foundation that has been laid”. But from that very day, the MCA21 website is non-functional for all essential data apart from basic information on the ministry and its role and functions, etc.

Why did this happen? What went wrong? Why is nobody talking about this drastic failure when it involves two of India’s best and most reputed software companies? There are many questions and no answer. All that we have is a bland statement on the ministry’s website saying that there are some difficulties and it is taking necessary measures to resolve it. It also says the portal is undergoing transition of its operations and services to a new service provider. But there were a full 120 days provided in the contract for training and transition before the handover was completed. And TCS claims that this was fully done to the satisfaction of Infosys as well as the ministry.

So what went wrong? Why is Infosys, which paid $50 million to bag the contract unable to get it running? The company earns only when it can make ordinary Indians and corporate India pay for every report that is accessed. It is also in charge of the second phase from January 2013 to July 2021, which has a project outlay of Rs357.81 crore, including Rs54.42 crore for independent project management and certification and a further spending Rs29.84 crore for continuous improvement and upgradation to the electronic service delivery.

In an email reply, a spokesperson from Infosys, said, "Transitioning a large application suite like MCA 21 at the best of times is complex. Successful transition depends upon the current state and stability of the applications and the full cooperation of both service providers. We believe that we have fulfilled all our obligations as per the contract."
 

What is MCA21? It is a showpiece e-Governance and corporate filing portal, which, for the first time has made all corporate filings available online. The website is mostly accessed and used by Chartered Accountants (CAs), lenders and shareholders. It contains data and financial details of over 6.5 lakh companies registered with the MCA. The initiative is designed to fully automate all processes related to enforcement and compliance of the legal requirements under the Companies Act.

Once MCA21 under TCS became fully operational, the government made it mandatory for companies to file all key corporate information including change in capital, change in address, directors, as well as the filing of balance sheets and annual reports etc online with the Registrar of Companies. For the last month, the work done by chartered accountants and company secretaries (CSs) has come to a halt, leading to suspicion and acrimony with clients, say our sources.

This also raises a larger issue. If a planned handover, in a relatively non-crucial website can break down for a month with no explanation, how will the government handle issues that could emanate from key online tax filing systems which had badly affect the finances of individuals and companies?

Infosys has denied making any changes to MCA21 portal. "Till date Infosys has made no significant changes to the system, which continues to run in the old environment which is managed by the incumbent vendor, Tata Communications. Any reports that imply that the instability in the MCA 21 applications is on account of our negligence are misguided. We are working with ministry to ensure that the system performs to its optimal level," the company spokesperson said.

Moneylife has written to the minister (Sachin Pilot) and secretary of the MCA as well as other ministries and a host of others seeking an explanation. Very few answers are forthcoming while wild rumours are making the rounds about the reasons for the failure.

At an interaction convened by a member of parliament (MP) on Sunday in Mumbai, several CAs were agitated that the crippled site is creating inconvenience for new as well as existing companies since 17th January. The contract, now won by Infosys, is worth $50 million.

In a notification issued on 8 February 2013, the MCA has informed stakeholders that there would be no additional fees for delayed filing of statutory submissions. “The ministry will consider appropriate and due waiver of the additional fee or any other issue being faced by stakeholders due to non-filing of information because of problems in MCA21 system in last few days,” it said in a notice. “The individual issues emanating since 17th January are being looked into and we are striving to resolve all pending issues by 22 February 2013,” the MCA said later on its website.

But this hardly reveals what the problem is or whether a solution is truly in sight. We learn that the ministry has now sought the help of TCS to get it back on track. But what about Infosys, which has apparently goofed up badly on transition management? We have not heard from the company and any response we get will be added to this report.

Meanwhile, angry company secretaries say that “handling MCA21 is not rocket science. Infosys took the job very lightly and goofed up”. If that is true, what are the consequences for Infosys? Why should the public pay the price? This ought to be a case study on things that can go wrong in public-private partnerships and privatisation programmes, especially at a time when the government seems to believe that it will be able to transfer tens of thousands of crores of subsidies to people through e-programmes.

(Additional reporting by Yogesh Sapkale)