Corporate data will talk and government will act now

by madhurna Sat Jun 18, 2011 4:08 pm

NEW DELHI: Primary data on corporate investments and savings will find greater consistency and accuracy with economic regulators set to make use of a systematic data collection method allowing real-time access to a regulatory information filed by companies.

Replacing the current system of manual sampling of data is an electronic reporting tool which can not only segregate large amount of data from filings made by corporates in stock exchanges and Registrar of Companies but also analyse them to form insightful trends.

Ministry of Corporate Affairs has already directed companies to submit their annual returns and financial results in a data-based format replacing the current practice of submitting scanned copies of such documents which can not be electronically analysed.

"We are in discussion with the corporate affairs ministry to sort out certain glitches after which the data on corporates could be easily available," said TCA Anant, India's chief statistician and secretary at MoSPI. The government aims to further classify primary corporate data into detailed sector-specific indices on investment trends and corporate savings.

"In the current format, we are not able to completely access MCA records and it is not possible for segregation of data to derive at clear trends," said Anant. The Reserve Bank will be able to come up with quicker and better estimates as they will now have a direct access to the corporate data under the new reporting format he said. The Central Statistics office would be able to access the data directly instead of taking it from the RBI . This would mean more accurate and timely data availability.

A high level committee on estimation of savings and investment chaired by Dr C Rangarajan had also recommended that savings and investment estimates from the year 2010-11 may be made using MCA21 data for all companies, dispensing with the blow up factor method," the committee noted in its report.

A senior official with the ministry of corporate affairs said, that one of the largest beneficiary will be the Reserve Bank as it currently uses a sampling system and would have an alternative to it in the future.

"RBI is a major user of the data as it uses it to forecast credit and deposit rates by analysing corporate activity levels," he said. The single reporting medium is being developed by regulators such as the Securities Exchange Board of India , ministry of corporate affairs and the RBI.

Commonly called as eXtensible business reporting language or XBRL, the reporting format becomes mandatory from July 2011. All companies listed in India and their subsidiaries, having paid up capital of Rs 5 crore and above or a turnover of Rs 100 crore or above will have to file their financial statements in XBRL format.

The first phase of the transition has, however, excluded banking companies, insurance companies, power companies and non banking financial companies (NBFCs). The move will further ensure that any mismatch in data filed with different regulators will promptly be reported and ensure inter-regulatory action against companies violating norms.

At present, companies independently share information with different regulators, and there is a possibility of filing different information with different regulators.
Source: Economic Times

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