New Delhi: At a time when India is in the midst of a severe health and economic crisis due to the novel coronavirus, the Narendra Modi government has asked firms to file an online form on their preparedness for COVID-19.
Chartered accountants have voiced their protest against the Ministry of Corporate Affairs’ move, saying it is avoidable and will add to the compliance burden of firms. They say when the government is encouraging work from home for the private sector, filing this form is an unnecessary additional compliance.
However, the government was quick to allay fears expressed by the chartered accountants.
When contacted by ThePrint, Injeti Srinivas, secretary at the Ministry of Corporate Affairs, said: “It is a confidence-building measure. It will require only an OTP-based verification and won’t require any digital signatures. Those filling the form will only have to say a yes or a no to implementation of a work from home policy.”
The office of Finance Minister Nirmala Sitharaman, who also handles the corporate affairs portfolio, also tweeted that this will not pose an additional burden for companies, and that it is only an appeal to companies to join hands against the pandemic. It also put out a sample of how the form will look.
The Company Affirmation of Readiness (CAR) is only an appeal to companies to join hands to contain the #Coronavirus disease through social distancing. #IndiaFightsCoronavirus
— NSitharamanOffice (@nsitharamanoffc) March 20, 2020
The form will be available from 23 March, and companies and limited liability partnership firms have been asked to fill it instantly.
“In order to generate greater awareness and confidence on our state of readiness, the Ministry of Corporate Affairs is in the process of developing and deploying a simple web form for companies/LLPs to confirm their readiness to deal with the COVID-19 threat,” states the letter dated 19 March, signed by Corporate Affairs Secretary Injeti Srinivas.
“The web form named CAR (company affirmation of readiness towards COVID-19) should be filed by an authorised signatory of companies and LLPs. CAR-2020 shall be deployed on 23 March 2020. All companies/LLPs are requested to report compliance using the above mentioned web service on the 23rd instant,” the letter states.
It also urges the companies to implement a work-from-home policy to meet this “severe and urgent health exigency”.
Also read: ‘Pay safe, stay safe’: Modi govt encourages digital payment amid coronavirus scare
‘Unnecessary compliance’
CAs point out that there is pressure on them due to year-end closing and scant staff presence, and this additional compliance is not required.
“I am not sure what purpose these forms will achieve and who in the corporate affairs ministry will review this. We are in the middle of one of the worst health and economic crisis in our working lives and yet they have added one more compliance,” said said Amit Maheshwari, managing partner at Ashok Maheshwary and Associates LLP.
“With a majority of company personnel working from home, this looks like an unnecessary compliance in the current environment,” he said.
Nikhil Vadia, chartered accountant with N.N. Vadia and Co., said even if it is a simple form, the fact that it’s a statutory declaration means companies cannot file it without obtaining necessary internal approvals.
“Most of the offices are now closed and the MCA wants us to file this immediately once the forms are uploaded on 23 March,” Vadia said.
Many CAs also used Twitter to flag their concerns to Sitharaman.
@nsitharamanoffc This is unnecessary compliance required by MCA:- All companies and LLPs are to file web based form for readiness towards COVID-19 on 23.03.2020. The web form CAR (Company Affirmation of Readiness towards COVID-19) should be filed by an authorised signatories.
— CA Vikas Gupta (@vtgupta) March 20, 2020
Also read: Faced with COVID-19, India chose to protect lives, not livelihoods. And that’s a good thing
Relaxations granted
The decision of the corporate affairs ministry on additional compliance comes even as it has announced that directors don’t need to be physically present in board meetings of companies until 30 June.
The government has decided to relax the requirement of holding Board meetings with physical presence of directors in view of #COVID19. #IndiaFightsCorona pic.twitter.com/VESw56zTSy
— NSitharamanOffice (@nsitharamanoffc) March 20, 2020
The capital markets regulator, the Securities Exchange Board of India, also announced relaxations for companies for declaring their fourth quarter and annual results for 2019-20.
The relaxations have been announced at a time when economic activity has been disrupted due to the COVID-19 pandemic that has ravaged many countries. In India, more than 200 people have tested positive for the virus, and four have died.
Prime Minister Modi, in a televised address Thursday, encouraged people to avoid all non-essential travel and stay at home.
Also read: How to defeat coronavirus – on the economic front
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