Citizens' Issues
Uber committing a fraud, says Delhi Transport Authority

The DTC order makes it even more difficult for Uber to resume normal services in the capital than before


The Delhi Transport Authority, in its order passed on 1 January 2015, said that it would be extending the ban on online taxi service providers, including Uber and Ola.
What is significant is the wording of the order and its view of the Uber business model. The order points out that on the one hand Uber claims to only be a technology company and uses a legal backdoor to escape its role by making agreements with the drivers, but is in fact a taxi service provider. 
While the DTA order also brings up issues regarding non-compliance with DTA norms for taxis, it also raises the serious wider point of Uber's business model.
“Therefore, the petitioner company is engaged in committing a fraud with the life and liberty of its customers, without their explicit knowledge thereof, as in their advertisements, they claim of providing safe and responsible journey to them,” the order said.
After the DTA passed its order, in a surprising move, Uber sought permission from the Delhi High Court to withdraw its petition against the ban on its services in the capital.
The Delhi High Court gave permission for the same.
Uber has been facing legal, regulatory and union hurdles all across the world and these latest developments have made it more difficult for it to ply normally in New Delhi.



Ankur Bhatnagar

2 years ago

DTA hasn't been able to explain how is Uber (or Ola or TFS) a taxi operator. They just keep saying that Uber is practically a taxi operator. This is not an explanation.

Who is Dr VK Saraswat, the new member of NITI Aayog?

Dr Saraswat, as former chief of DRDO has been also red-flagged by the Comptroller General of Defence Audit-CGDA over his several decisions that resulted in the Defence Ministry curtailing his financial powers


The Prime Minister's Office (PMO) appointed Dr VK Saraswat as full-time member of newly established National Institution for Transforming India (NITI) Aayog. Dr Saraswat is former Secretary of Defence (Research & Development- R&D), but is more known as one of the high profile former chiefs of Defence Research & Development Organisation (DRDO). However, his inning at the DRDO was marred by controversies resulting in the government turning down his extension. He was even awarded a jail sentence for contempt of court.


Dr Saraswat was the key scientist in the development of the Prithvi missile and its induction in the Indian armed forces.


A PhD in Combustion Engineering, Dr Saraswat started his career in DRDO in 1972 at Hyderabad-based Defence Research and Development Laboratory (DRDL), he was responsible for the development of the country’s first Liquid Propulsion Engine, DEVIL. As Project Director of Prithvi, he steered the design, development, production and induction of the first indigenous Surface-to-Surface missile system into the armed forces. He is regarded as one of the key scientists in the team of former President of India, Dr APJ Abdul Kalam, who is said to have had a deep influence on Dr Saraswat.


He was conferred the Padma Shri in 1998. He was also conferred the Padma Bhusan by the Government of India in 2013.


However, his career was not without controversies. In 2012, Dr Saraswat took a stand contradictory to the then Army Chief, General VK Singh, who had labelled Tatra trucks as substandard. Talking about Tatra trucks at a press conference, Dr Saraswat had said, "Tatra truck is an outstanding truck...They have a very good cross country capability and can move at good speeds."


Earlier in 2010 too, he had torn into the armed forces for failing to overcome their 'temptation' to induct latest imported weapon systems. Speaking at the National Technology Day in May where the then Air Chief Marshal PV Naik, Admiral Nirmal Verma and Gen VK Singh were also present, Dr Saraswat had said, "Services also must understand that while the temptation may be overwhelming to field proven, state-of-the-art imported systems, they too have a role to play in the country’s economic and industrial growth. No foreign system can be customised to completely address our long-term requirements."


Interestingly, as of now, both Gen Singh and Dr Saraswat have become part of the Narendra Modi government. While the former chief of DRDO has become full-time member of NITI Aayog, the former Army Chief is the Minister of State of External Affairs and Minister of State (independent charge) for North East Region, in the Modi government.


In a September 2012 report, the New Indian Express had said, "...a nightmare was revealed recently when Defence Minister AK Antony ordered the Comptroller General of Defence Audit (CGDA) to do a secret audit of India’s equivalent of the futuristic workshop of James Bond’s ‘Q’ — the Defence Research and Development Organisation that goes by the handle DRDO."


Quoting the CGDA, the newspaper had said, "DRDO has been developing equipment which is either sub-standard or have extended deadlines and additional budgets. Many of the projects have been sanctioned without the requisite government approval. Only 10% of projects have come to the Ministry for clearance. Corruption and nepotism exists in the upper echelons and there is an exodus of qualified scientists."


"The CGDA has questioned why he (Dr Saraswat) granted Rs2.88 crore to a mathematics institute to develop a futuristic radar when its scientists are not even remotely connected with research relating to the project. Incidentally, Dr Saraswat is the president of the institute’s governing body. The audit also stated that the institute lacked expert manpower and started recruitment only after getting DRDO funds that were released without due diligence. A Dehradun scientific lab was granted Rs14 crore to develop a communication link, while the institute headed by Dr Saraswat was also sanctioned Rs2.98 crore to develop the same technology — it doesn’t have even basic facilities like computers for individual researchers," the report says.


Although DRDO denied all the observations of the CGDA report, it affected the career of Dr Saraswat.


In September 2012, the Defence Ministry issued an order that said the Director General of DRDO would take all financial decisions in consultations with the Finance Division of the Ministry. Prior to that, Dr Saraswat had the power to grant financial approvals up to Rs50 crore on his own.


He retired from DRDO on 31 May 2013 when the United Progressive Alliance (UPA) government headed by Dr Manmohan Singh decided not to extend Dr Saraswat's tenure. Interestingly, quoting sources, a report from Times of India said, that former President Dr Kalam had sent an eloquent endorsement of Dr Saraswat, who was seeking an extension as DRDO chief.


The new full time member of the NITI Aayog also had a run in with the High Court. In September 2014, Dr Saraswat and Dr D Malakondaiah, the director of Defence Metallurgical Research Laboratory (DMRL) were sentenced to three week's simple imprisonment by Madras High Court. The HC held them guilty for disobeying its April 2009 order related to re-employment of a clerk in a school run by a wing of the government’s scientific organisation.



R Balakrishnan

2 years ago

Modi Sarkaar. People got what they wanted. Modi Sarkaar. As corrupt or more corrupt than UPA for certain. Looks like what UPA made in 60, they want to do in five.

SEBI widens the scope of investment by Foreign Venture Capital Investors

With this amendment, the bottleneck for investment in the infrastructure sector through the FVCIs route has been removed


As per an amendment to its regulations, the Securities and Exchange Board of India (SEBI) has substituted the definition of “Venture Capital Undertaking.” 
According to the definition stated in Regulation 2(m) of the Securities and Exchange Board of India (Foreign Venture Capital Investors) Regulations, 2000, “Venture Capital Undertaking” meant a domestic company, not having its shares listed on any recognised stock exchange in India; engaged in the business of providing services, production or manufacture of articles or things, with central government’s approval by notification in the Official Gazette. It excluded the activities or sectors of the negative list, mentioned hereunder:
Non-Banking Financial Companies (NBFCs) [Except those registered with the Reserve Bank of India and categorised as Equipment Leasing or Hire Purchase Companies].
Gold financing (Except the companies engaged in gold financing for jewellery).
Activities that have been disallowed under the industrial policy of Government of India.
Any other activity specified by the Securities and Exchange Board of India (SEBI) in consultation with the Government of India.
With the new amendment dated 30 December 2014, the new definition encompasses Core Investment Companies (CICs) in the infrastructure sector, Asset Finance Companies (AFCs) and Infrastructure Finance Companies (IFCs) through the Foreign Venture Capital Investors (FVCIs) route, which were excluded before. 
Leasing as a proportion of total asset finance is negligible. The inclusion of NBFCs categorised as Equipment Leasing or Hire Purchase Companies did not hold much significance practically because they were unpopular concepts, contributing a meagre share to the total asset finance. The previous regulations were at loggerheads with the practical scenario.
In most infrastructure projects, funding is through Special Purpose Vehicles (SPVs) which are basically CICs. Thus, representations were made by the relevant sectors and SEBI also proposed that the FVCI Regulations be suitably modified to replace Equipment Leasing and Hire Purchase Companies with AFCs and IFCs as the latter entail broader concepts which are indispensable to align the Regulations with reality.
The benefits of the amendment:
With this amendment, the bottleneck for investment in the infrastructure sector through the FVCIs route has been removed. It will boost the infrastructure sector of our economy through the injection of funds from overseas. As India is a developing economy, it will give a positive impetus to the economy.
A possible new wave of foreign capital:
Since the advent of liberalisation, foreign investments have been the backbone of the Indian economy. The financial crisis in the global markets and consistently volatile markets made the outlook of the Indian economy grim. This Amendment might be the magic wand to pull India out of the economic slump and ensure development of the country by infusing funds into the infrastructure sector. It also has positive spill-over effects over various other sectors and the entire economy.

(Neha Somani works with Vinod Kothari and Company)



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