The government will sift through the financial data filed by companies with the Registrar of Companies to get a better picture of their investments and expenditure, helping it get better inputs for key policy decisions such as tax incentives. Financial details submitted with the RoC will be aggregated under various parameters such as investments, deposits and trade debt, a government official told. The initiative is driven by the ministry of corporate affairs. The RoC has financial data of nearly 10 lakh companies stored in its database management system, MCA-21.
This move will help RoC forward data relating to private investment to the nodal ministries, enabling better decision making within the government, particularly to determine the efficacy of tax sops given to various industries. Currently, detailed financial data are available only for listed companies while financials of unlisted companies are rarely put through the scanner. The data will also be used to draw benchmarks for each sector by looking at their annual growth rate, investments and performance.
A high-level committee on estimation of savings and investment headed by C Rangarajan, now chairman of the Prime Minister’s Economic Advisory Council (PMEAC), had also made a similar suggestion. The committee, in its report submitted in March 2009, had recommended that estimation of corporate savings and capital formation can be gauged using the MCA-21 data.
“The MCA data forms a huge knowledge base and is very authenticated as it is periodically reviewed. If an aggregated or a disaggregated analysis of the available financial data is done, it can give us an accurate perspective on the performance of companies as also about sectoral reformation,” said Mr Ashok Haldia, director, PTC India Financial Services.
The MCA-21 filings have key data on a company’s public deposits, trade debt, loans and advances and investments in securities. The data, if segregated and compiled in a proper manner, can help determine the key economic estimates, the official said.
The ministry of corporate affairs will first segregate the data sector-wise before subjecting it to detailed financial analysis.
The ministry of corporate affairs is already using the MCA-21 data to develop an early warning system in unearthing corporate frauds.
