The deep rot

Two separate frauds — BluSmart’s Rs 550-crore electric vehicle scam and the PACL real estate scandal pegged at Rs 48,000 crore — have become twin mirrors reflecting the deeper rot in the country’s regulatory ecosystem. This week, BluSmart suspended cab services in major cities following SEBI’s crackdown on its promoter Gensol Engineering. Users and investors were left stranded, their trust shattered. SEBI has barred the key promoters from the securities market after exposing a fraudulent diversion of funds. Meanwhile, the Enforcement Directorate raided the premises of AAP MLA Kulwant Singh in Mohali and Congress leader Pratap Singh Khachariyawas in Rajasthan in connection with the PACL scam — a decades-old real estate racket that duped lakhs of investors.

Both scams expose similar fault lines: weak oversight, inflated promises and delayed regulatory action. BluSmart was shielded by its green-energy sheen until it was too late. Red flags were allegedly visible to insiders, yet the public and regulators failed to act. The PACL benefited from alleged political proximity that allowed a massive Ponzi scheme to flourish unchecked. The common thread between the two scandals is the erosion of public faith. That an EV startup, hailed as a clean mobility pioneer, could be implicated in fund diversion is as troubling as politicians being linked to a Rs 48,000-crore investor fraud.

These cases demand more than piecemeal action. A dual strategy is needed: tighten disclosures for early-stage ventures and enhance scrutiny of firms receiving public or institutional funds. Regulators like SEBI and ED need better coordination, speed and sharper enforcement powers. Political parties must stop shielding bad actors, whether entrepreneurs or elected representatives. India's push for climate tech and investor-driven growth cannot rest on compromised ethics. Whether it's refunding BluSmart wallet users or recovering PACL assets, restoring public confidence must be the top priority.