MCA21 is down for a month after a handover of the management by TCS to Infosys. Why?

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)

9 years ago
There is motive behind everything which has to sorted by them only and not wash their dirty linen in public.
9 years ago
What to comment, professional myself FCA, here two czars are slugging it out
Avinash Murkute
9 years ago
Those who pay taxes should honestly not be humilitated for protecting software gllitches. Why should not their CMM level certification should not be downgraded? Such institutions are not working free. And the people working for such institutions become PUBLIC SERVANT under the definition of PUBLIC SERVANT, and they should not run away, just because they are employeee of such poor companies? No vendor is above The Constitution of India no matter how deep are connections in tender management.
Anand Halve
9 years ago
Effort, without results is the approach of all institutions supposed to work for the interest of our people, as in “...central bank has done its best to ensure that transactions in India are completely secure..."

How would the Govt react if individuals were to say, "we have done its best to ensure that we pay our income tax" but if the tax was not actually paid?

The problem is that institutions never have to feel the difficulty that people face.
9 years ago
I commend Moneylife on its boldness in analyzing and publishing such information. It is indeed interestinmg that bthere was no such repoprting in any mainstream media; obviously Infosys is a holy cow to some.
To me, a goof up is a goofup whoevber is responsible. Theyt should learn and perk up.
It is also interesting that nobody from those responsible has apologize to the user public nor have they talked about the effort that they are or should be putting into the correction.
Ramesh Bhat
9 years ago
I am flagging this as unprofessional, incompetent piece of journalistic work or paid news.

As MSH points out, it does not have a Software/IT project management perspective, Does not have Infy or Corporate affairs ministry viewpoint.

Best if anyone investigated the down time of MCA21 over the past few years, the perspective of the fantastic show piece built by TCS would have been exposed.

Another Tata (CMC) project execution made a Madhya Pradesh official say "Oracle does not work" in Larry Ellison's global press meet.

Sucheta Dalal
Replied to Ramesh Bhat comment 9 years ago
Mr Bhat

I dont know who is paying you for posting this, but the other point of view can only be presented if the other side wants to speak or has something to say.

My email is addressed to Sachin Pilot and the Secretary MCA. No reply.
It is copied to the Prime Minister's office. Have an auto acknowledgement.
It was copied to N R Narayana Murty and all the TCS team. No reply from Mr Murthy who I know personally.
It was copied to 3 members of parliament.
The discussion with the CAs happened in the presence of Mr Sanjay Nirupam, a Congress MP at Kandivli.
I have feedback from heads of associations of Chartered Accounts and Company Secretaries and IT service providers, but all off the record.
So kindly tell me which perspective did you need added to the report? I also notice that everytime we write something against Infosys, people from a certain part of the country get aggressively defensive and start accusing us of bias.
If you were not into dubious, special purpose reading, you would have noticed all our reports on TCS handling the passport automation in Pune.
As an Indian, wake up to the fact that private sector IT giants are proving to be just as "competent" as public sector and this should worry us.
Also, have the honesty to disclose your motives.
Vinay Joshi
Replied to Sucheta Dalal comment 9 years ago

All the opponents of this excellent CREDIBLE report of yours have no particular domain skill to comment.

Vinita, honorable an exception,valid conception. [this is not addressed to her.]

You just have, ignore it!?

How many concerned & filed MCA21?
No manual acceptance of Q3 results or even constitutional change!

How many know - SORRY- emancipate the need, can understand the authenticity of the painstaking report revealed?

As a matter of fact, the handover, fully convergent,transition to proprietary algorithm in the lead time,[lowering operational cost as their bid lower], customization platform, having known the architecture & functionality BUT, BUT now [23rd] making a plea, whereas the
compatibility hardware, transitioning large application complex suit can take some time.


Now, Infy has decided to continue to retain TC services to manage the technology infra for the time to come tho' Infy working closely with ministry to overcome the problems.


TC [as different from TCS] has fully cooperated with the Ministry & its obligations.

Now the ball is in the Ministry's court to answer.

When MCA21 was launched in '06 it was God send Gift.

Ms.Sucheta & Ms.Vinita, this is for you only - ---

iGATE has shaken up billing model of s/w industry, outsourcing of IT services.

Instead of fee based 'outcome' based billing.If the services don't deliver as agreed upon result the customer pays less.

So Vinita a point to be ADHERED NOW by Govt. outsourcing dept's.

Taxpayers money, instead of time & material billing has to be saved, an ongoing criminal practice, billions at stake.

Jan'13, 'The Economist', iGate took an advert; --- 'If this ad does not deliver results',we're not paying 'The Economist'.

Such a bold foray will now transform, should, the billing model to lower the cost to the consumers.

Sucheta, iGate Phaneesh Murthy,[Patni C, merged.]is an ex-Infy.
This can take the industry by storm. IT co's margins may increase but debatable!?
Since his episodes in US he is outspoken critic of the industry on all fronts.


Avinash Murkute
9 years ago
Happy to read this report after experiencing quality of services at cpc bengaluru. Honnsty can not be incorporated or contracted, it remains in blood, concerned should understand philanthrophically.
9 years ago
I think it will be nice if you could investigate and write a complete article. While there is no hiding the fact that Infosys goofed up the transition, people who handle software projects know very well that a good software will not breakdown the next day when handed over to somebody - software is not a pet dog :). Probably the software developed in the first place was like a pet dog, working in the hands of the owner :). Why did the ministry could not estimate how bad the software internally, even if appeared to work - I think that will be the larger question for all the large and mission critical projects.
Replied to MSH comment 9 years ago
i feel inside programs one can set dates by when the program can stop malfunctioning. this is the usual method adopted by Software companies when they hand over software to the buyer so that it will deliver functioning till licence agreement is valid.
Sucheta Dalal
Replied to MSH comment 9 years ago
Mr Hegde, the same goes for your comments too. Let specialised IT companies explore details about software contracts and the handover process. We are not even competent to do it.

I am curious why you and Mr Bhat are not haranguing all the main stream publications for not covering this goof up and researching it to your combined satisfaction.
Or for that matter IT magazines, who enjoy the advertising, foreign junkets and patronage of big software giants so have not dared to rip them for their failure in passport and other contracts.
Why such incredibly high expectations from a tiny magazine which a tiny staff? Why not direct your questions where there deserve to be directed?

Sucheta Dalal
Replied to MSH comment 9 years ago
Another one... did you not read that there was a 120 day handover? We are not talking about a glass bowl here that it will break while being handed over.
In over a month, maybe Infosys ought to have come out with an explanation.
Replied to Sucheta Dalal comment 9 years ago
:). A counter view need not be an indication of vested interest. All the big names of Indian IT industry do a bad job when it comes to government projects in India and their incompetence is hidden behind the big branding exercises. Over and above this they constantly try to malign each other in the government projects.(Department of Posts and some of the defence projects are a classic case of this) I feel while MCA was reflection of the incompetence of two big players hidden behind the brands, on a different level it was the failure of government to understand the level of incompetence deployed by these companies, in the Government projects, while developing mission critical software. Stakes are high in many projects - Passport, Income Tax, e-biz, many defence projects, etc. since many of them involve these big Indian IT companies. They are no better than public sector organizations, when ti comes to government projects in India and many times just blame the government procurement as the problem :). What my previous post meant was it is time governments wake up based on MCA fiasco and take corrective actions on all the other projects, proactively. Probably my earlier post did not convey this message
Vinita Deshmukh
9 years ago
It is time to scrutinise Public-Private-Partnerships which seem to be bringing in more inconvenience than faster governance through technology, enterprise and resources that corporates are known for. Whether it is the passport issue, infrastructure or now the Corporate ministry website, accountability is the casualty because there are no stringent laws for private agencies to ensure accountability!
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