Citizens' Issues
Gujarat government not giving info on Modi's travel bills: Activist

While Narendra Modi is raising questions on foreign tours of Congress President Sonia Gandhi, his own office is not providing details of his travel bills of last five years

Ahmedabad: In a huge embarrassment to Narendra Modi who has been raising questions on the expenditure on foreign travels of Sonia Gandhi, a Right to Information (RTI) activist in Gujarat has accused the state government of not providing details on the travel bills of the Chief Minister and his ministers for the last five years, reports PTI.


Vadodara-based RTI activist Trupti Shah has sent a letter to Modi, saying information about his and his Ministers' travel-related expenses, mostly by helicopter, during 'women empowerment sammelans' had not been provided till date.


Shah said she had filed an RTI application on 18 July 2007 seeking details about the expenses incurred by the state government for organising the sammelans in 27 places across the state in 2007.


"The Chief Minister had organised women empowerment sammelans in 27 places in Gujarat in 2007 just before the assembly polls and I have asked under RTI about expenses of this sammelan particularly because the women of Gujarat are asking for implementation of Domestic Violence Act and appointment of protections officers which have been denied due to lack of funds," she said.


Shah alleged she was denied the information even after repeated reminders. She said the state's General Administrative Department (GAD), in a letter dated 1 November 2007, provided the list of 27 places visited by Modi from 10 March 2007 to 20 September 2007.


But regarding the travelling expenses, the letter stated "the office of the Chief Minister did not mention the travelling expenses and so the CM's travelling expenses may be considered nil."


This, the activist alleged, is "ridiculous" and "unbelievable" because Modi had travelled to most of the 27 places by helicopter.


Shah then shot off a letter on 20 November 2007 seeking details about the name and agencies who bore the expenditure.


When her letter didn't elicit a response from the GAD, she sent a reminder on 18 January 2008 and again on 17 April 2008 but she did not get any reply, Shah alleged.


After failing to get the required information, Shah filed a complaint under the RTI Act before the Chief Information Commissioner (CIC) of Gujarat.


During the last hearing on 26 September 2012, the CIC directed the GAD to hand over the relevant information to Shah before the next hearing in October. The officer concerned said the information was not available though they have requested the CMO and other ministers to provide it, Shah said.


The letter comes in the wake of Modi seeking answers from the Centre regarding Congress President Sonia Gandhi's trips abroad which, he alleged, have cost the exchequer Rs1,880 crore.


Another Gujarat-based RTI activist Bharat Singh Jhala said, "State government should disclose every detail of travelling whether he (Modi) went to China or Japan or elsewhere. Where did the funds come for the Vivekanad Yatra.


If there is nothing wrong then the whole data should be given otherwise everything is 'golmaal'".


He alleged that the Gujarat administration department is also not revealing information and claim to be under pressure.


US presidential elections: Debating the Teflon president

The race for US Presidential elections is in the final stretch and it is getting very serious. The presidential debates might be Romney’s best chance to catch up with Obama—it may be the last roll of the dice

President Obama’s poll numbers are beginning to defy gravity. The economy has not improved and it actually might be getting worse but after the Democratic Convention in Charlotte, North Carolina, where former president Bill Clinton laid out the case for his re-election. President Obama seems to be on a bit of a roll. Everyone thought that Mitt Romney had made a breakthrough with his selection of the young and energetic Paul Ryan to be vice-president and that Ann Romney’s speech at the Republican Convention, particularly the bit about the fairy-tale marriage, had humanised him and would enable him to make a break-through. But it hasn’t happened and President Obama’s job performance ratings are once again hovering around 50% comfortable territory. Now in some national polls he is leading by four percentage points and in some crucial swing states like Ohio by 10%.


So Mitt Romney must stem the draining of support and reverse things before it’s too late and the best bet is the three presidential debates. Romney is a good debater. To hear the Democrats tell it has a great debater, he must now score a decisive victory in the debates and also he must seem more likeable to the public. He has to connect with them and he has to look them in the eye and say I am one you guys and also I care about each one of you not just 47%. My comment about 47% was meant for rich bozos and must not be taken too literally. 


This is a complex task as he has to do all this while answering what are likely to be tough questions about the domestic policy, foreign policy and the like and if the liberal bias of the media is any indication, he has to make his own openings. As the 23 Republican debates showed he is a competent debater, well-versed with the facts, but against him is the comfortable Harvard-educated lawyer who has a natural way with words and for whom even a draw will look like a victory. So the onus is on Mitt Romney to do the running.


In the modern era presidential debates have been around since 1960 when John F Kennedy and Vice-President Richard Nixon had debates and John F Kennedy looked a more comfortable before the camera and went decisively ahead. The latest debates to make a difference were the debates between George W Bush and Al Gore where Al Gore made some misstatements and exaggerated facts and paid the price for it. Al Gore had a lead of five percentage points going into the debates it was dead heat coming out of the debates and George Bush won a squeaker of an election aided by the Supreme Court.


One of the things the debates does for the challenger is that it increases his stature as he stands on the same podium with the president. The large audience (more than 50 million are expected this time) gives a unique opportunity to both the contenders to state their point of view. President Obama has been rehearsing with John Kerry playing the role of Romney and Governor Romney has been rehearsing with Senator Rob Portman of Ohio playing the role of President Obama. Governor Mitt Romney seems to have taken more time off in his preparation and has concentrated more on the debates than President Obama.


There are many things that the American people want to know from both the candidates. They want to know from President Obama as to why he thinks they are better off than they were four years ago and what his plan is for the next four years. And they want details from Mitt Romney a fleshing out his plans regarding taxation and balancing the budget. They will also want to know what his foreign policy will be with regard to China, to Russia, to the Middle East, and the like.


“We are better than this”, a national convention on how to prevent gun death and injuries has sought to urge Jim Lehrer the moderator of the first presidential debate to ask the candidates about gun violence.


The letter partly states that the debate will take place within ten miles of two of the most deadly mass shootings in US history—Columbine High School and Aurora movie theatre.
Every day in America 32 more Americans are murdered with guns.

  • During the next presidential term 48,000 more Americans will be murdered unless Americans do something about it.


The first debate is to be held at the University of Denver and one moderator is Jim Lehrer of PBS who is a veteran of eleven presidential debates. I do hope that the avuncular Jim Lehrer will help bring out clearly the contrasts between President Obama and Mitt Romney. 


Both sides are busy with the expectations game, lowering the expectations of their side so that even an average performance will look good. After the debates the talking heads on both sides will be out talking up the performance of their own candidates.


The race is in the final stretch and it is getting very serious. This might be Romney’s best chance to catch up with President Obama—it may be the last roll of the dice.


(Harsh Desai has done his BA in Political Science from St Xavier's College & Elphinstone College, Bombay and has done his Master's in Law from Columbia University in the city of New York. He is a practicing advocate at the Bombay High Court.)


Venture capitalists make big money, right? Wrong

A Kaufman Foundation research has found out that investment in venture capital is a bad idea as it has not beaten the American markets since the late 1990s. Worse, investors have got back less cash than they have put in

Facebook has been the most sought-after investment story of the decade, with its recent high-flying (if highly controversial) initial public offering (IPO) generating millions of dollars for its founders and the investment firms that invested vis-a-vis venture capital (VC). The success story of Facebook has prompted investors, institutions and the general public to truly believe that VC produces superior returns, over and above market returns. However, a recent research study, conducted by Kaufman Foundation, an institution that invests in VCs, found out that VC is broken and has indeed produced inferior returns. Here are some of the findings:

  • Companies like Facebook, Zynga, Groupon, etc have merely been outliers. The study stated that VC returns haven’t significantly outperformed the public market (it has used American benchmarks) since the late 1990s.
  • Since 1997, less cash has been returned to investors than has been invested in VC.
  • Given its opaque structure and nature, VC is a losing proposition with only one-fifth of 100 funds beating the public market by more 3% (with half of these incorporated prior to 1995!).

In other words, VC is just not worth your time, unless you want to gamble all your chips, hoping that the VC they invest in will be able to find the ‘next’ Facebook.

VC is a form of investment vehicle that concentrates on start-ups and early stage investing. They invest in companies that have no prior track record. They invest in ideas and act as incubators to those ideas and use the funds to hire talent and infrastructure to grow ideas into reality. Facebook, Google, Yahoo!, Flipkart are some examples of companies that grew out of VC backing. Typically, they invest in a growing a firm for a few years, sometimes ranging from 3-10 years, depending on the idea, and cash out during the IPO.

One reason that investors (or institutions/investment firms) believe in VC as an asset class is because of a well-known behavioural bias known as narrative fallacy. The media has sold countless success, albeit sensationalist, stories to the investment public who, more often than not, fall for it and believe in it strongly. A lot of investment funds (which in turn invest in VCs) have mandates set up by a bunch of brilliant Ivy League graduates, armed with PhDs and MBA degrees which state that some percentage of the corpus must be invested in VC (a mandate is more of a rule than anything else). These mandates are created despite the abysmal track record of VCs. The study clearly states this startling statistic: 62 out of 100 VC funds failed to exceed returns available from the public markets, after fees and carry were paid. This leads us to another key issue for underperformance—high fees.

One of the solutions Kaufman Foundation has suggested is to, obviously, abolish needless mandates or rigidly defined rules and, instead, have flexible mandates to invest anywhere, so VCs can be avoided at all costs. It is important for the investment public (and institutions) to know the ratio of failure to success and it isn’t looking good at the moment. The media, however, doesn’t write about horrid stories of funds gone bust because, ironically, in the investment world, pessimism doesn’t sell.

Touching upon the issue of high fees, most investment funds operate on an incentive structure known as “2-20” (2% of corpus as fees and 20 percent of profits) which puts the onus on funds raising rather than searching for profitable opportunities. Regardless of fund performance, the fund manager collects his 2% fees. The larger the funds collected the deeper will the fund managers’ pocket be. Moreover, most the funds collected go into high risk VC (partly can be attributed to mandates). Hence, there is no regard to management of funds or allocating it in efficient investment channels nor is there any effort to find the next ‘Facebook’.

The study stated, “The most significant misalignment occurs because limited partners (LPs) don’t pay VCs to do what they say they will—generate returns that exceed the public market. Instead, VCs typically are paid a 2% management fee on committed capital and a 20% profit-sharing structure (known as “2- 20”). This pays VCs more for raising bigger funds, and in many cases allows them to lock in high levels of fee-based personal income even when the general partner fails to return investor capital.”

One of the solutions recommended by Kaufman Foundation is to pay for performance. In other words, change the way VC managers are incentivised and rewarded in such a way they will be more focussed on fund management and identifying investment ideas instead. It even suggested following a ‘European’ style where investment money is actually returned once a hurdle is achieved. This puts far more clarity on investment and actually might entice investors to put money.



Colin Sprague

5 years ago

The new way to play VC is by providing services for stock instead of cash. In this manner a service provider gets shares of an emerging company pre-IPO and only has time that is at risk. In the end, they will make money and it's then just a matter of how much, which will depend on the success of the IPO. These deals are quite frequent and easily found at

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