Govt gives more space, says IT'll happen at RoC

Computerisation, improvement in infrastructure on cards.

For long, India Inc has aired its frustration with the procedural delays and ineffective working of the registrar of companies (RoC). In the second of a two-part series, we do a reality check on the state of affairs

The government believes that a difference in the functioning of the Registrar of Companies (RoC) will be visible some time in October 2006, in the peak season of document filing by companies.

The ministry of company affairs is not just working on the widely-publicised computerisation initiative called MCA 21, it has also drawn up plans to improve the physical infrastructure and the public image of the RoCs.

"In Mumbai, we are in talks to acquire office space in the World Trade Centre for the RoC there," a ministry official said. The RoC in Delhi will set up four permanent centres to accept documents. RoCs in Chennai, Bangalore and Hyderabad are also set to acquire new buildings.

While a makeover of all the 20 RoCs is unlikely to happen soon, the dingy state of some of the important centres lacking even the basic facilities is something that the government promises to rectify.

Some months back it opened a new RoC building at Ernakulum. RoCs at Ranchi, Dehradun and Raipur are also in the pipeline.

The Rs 341-crore computerisation programme being implemented by a consortium led by Tata Consultancy Services remains the single biggest initiative which is expected to change the way the RoCs work. All the records of financial year 2002-03 onwards are being digitised. "We expect about 25 per cent of document filing to move to on-line system in the first three years. That would relieve the burden on the RoCs to a large extent. Once the on-line filing begins, we will focus the RoCs towards scrutiny and inspection work so that compliance is checked on a proactive basis. We will be ready to redeploy our staff for qualitative work then," the official said.

For instance, the ministry recently directed all its regional directorates (RDs) and RoCs to carry out a detailed scrutiny of the books of companies raising Rs 10 crore and above from the market. It also directed a detailed scrutiny of the companies accepting deposits of more than Rs 10 crore.

The computerisation is not likely to result in huge surplus staff as recruitment has been on hold for many years. According to a director at the ministry, last month the government abolished nearly 100 B, C and D grade posts.

It is now evaluating abolition of some posts at grade A level. While corporates can look forward to a modern RoC in the next two years, those who have been filing their accounts without caring for compliance can expect to receive notices from the RoC as the government focuses back on scrutiny of accounts.

Recently, the ministry also directed the 20 RoCs across India to process the application for registration and name approval of a company within five days.

Under the Citizens' Charter 2003, the government had prescribed 13 days. "We are not expecting miracles, but this is one way of getting the RoCs to deliver. Once the computerisation process is complete, registering a company and getting a name approved should not take more than a day," the official said.

Government's gameplan

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• Shift RoCs to modern buildings
• Computerisation programme MCA 21 to start easing filing rush by October 2006
• Focus on scrutiny and inspection once online filing begins
• Appraise RoCs' performance on the basis of efficiency
• Cut the bureaucracy