Government

Quietly, Govt Sold Vehicular Bulk Data to Firm Without Price Discovery, Privacy Protection

Fast Lane Automotive developed a business model offering technological solutions based on this exclusive right to Indian citizens’ data to its clients. And its business boomed. 

New Delhi: Nearly six years before India’s transport ministry announced and then scrapped its bulk motor vehicle data sharing policy over privacy and misuse concerns, the Union government sold a copy of the country’s entire vehicle registration database to a private Indian company. 

The deal flew completely under the public radar. The government let the deal linger on for a long stretch despite officials in the ministry flagging concerns over lack of ‘price discovery’ – a bureaucratic phrase to warn that data had been sold cheaply. 

Put simply, price discovery is a process that involves affixing the price of a security, asset or commodity. In this case, it’s the vehicular data.

They concluded that the contract was stacked “heavily in favour of the customer”.

According to government documents obtained through Right to Information Act (RTI) queries, this September 2014 deal, in which vehicle registration data was sold to an auto tech solutions company called Fast Lane Automotive Private Limited (FLA), faced several objections from government officials. Yet, it took the ministry nearly two years to put an end to the controversial deal. Till date, FLA continues to have commercial access to the data that was sold under this rescinded contract with the government. 

This data – in essence an inventory of the motor vehicles registered across India with the transportation departments of all states – may not have contained the personal details of vehicle owner but internal government documents show that months after the contract was signed, the National Informatics Centre (NIC) raised general security and privacy red flags over the problems with sharing bulk data to private buyers. 

This 2014 deal, which has not been previously reported, proved extremely important for FLA. The company went on to earn crores of rupees within years and later, while objecting to the deal being cancelled by the ministry, called access to the data stockpile the “basis” of the firm’s business needs.

The value of the vehicle and licence database lies in the insights it provides into India’s fast-growing auto sector. Coupled with other data sets and information available on citizens, this data provides vast business opportunities for bankers, financial companies, automobile manufacturers, insurance companies, marketing companies and others. 

Also read: India Needs a Surveillance Law That Goes Beyond Personal Data Protection

Other takers?

The 2014 deal under which FLA got a copy of the data strangely appears to have had no other private takers, despite the fact that ministry officials suggested they were open to sharing the data with other companies and at the same rate given to Fast Lane. 

A 2016 government file indicates that one joint secretary even noted that the government had received another application for bulk data sharing, but suggested the ministry’s finance wing be consulted regarding price discovery before processing the request. 

Fast Lane combined the data with information collected from many additional data sets to become an important player in the global market for technological solutions based on Indian vehicle registration data. Ministry officials did internally raise fears about such bundling of databases, although the contract specifically allowed it. But they did so belatedly – years after Fast Lane Automotive enjoyed this low-cost bounty.

The deal was based on a proposal from Fast Lane itself, and was not the product of an official tender or bidding process, although the government files documenting its approval noted that the same terms would be offered to other interested private parties. 

The private company, Fast Lane Automotive, developed a business model offering technological solutions based on this exclusive right to Indian citizens’ data to its clients. And its business boomed. 

It offered the information to domestic as well as foreign buyers. Within a year of accessing this data, the company’s turnover zoomed by a whopping 163 times – up from Rs 2.25 lakh (in fiscal year 2014-15) to Rs 3.70 crore (in fiscal year 2015-16). The company’s revenues continue to grow till date on the back of this database, a scrutiny of its financial returns over the past five years indicates. In fact, it saw a rise of 333 times over the period under review.

The documents – accessed through several RTI queries filed by independent data governance researcher Srinivas Kodali and this correspondent – show the ministry gave a further leg-up to the firm by granting a ‘grace period’ to access data at no extra cost, overruling serious objections from the NIC and its own officials.

The pact was signed five years before the government announced the official Bulk Data Sharing Policy of 2019 that opened up bulk data to buyers. Though this new policy died young in mid-2020 over “privacy concerns”, Fast Lane continues to hold the data it was given. 

The government has not asked Fast Lane to delete the data, and the company, which claims international auto giants as customers, still owns the data set. Its website says that since September 2014 it has had access to pan-Indian registration data.

Transport minister Nitin Gadkari told the Lok Sabha on February 11, 2021 that the government has not considered asking private firms to delete the data shared with them.

The Wire contacted the chief executive officer of FLA, Nirmal Singh Saranna, on the phone and later with detailed written queries. 

In his detailed response to the queries, Saranna denied any wrongdoing on the part of the company. “There was no impropriety at all at any level or any stage,” he wrote. (Note: The full text of his reply to written questions is appended below)

Saranna also asked this correspondent to “desist from undue harassment to FLA and its officials.”

He added, “If in spite of this reply, you choose to act maliciously against FLA, FLA will take recourse to appropriate legal remedies, as and when required, including in respect of defamation and disparagement.”

The Wire’s examination of this deal, as shown below and in Part 2 of this story, does not point towards illegality. Instead, it peels back the layers of a small company’s lucrative deal that has been hitherto unreported and of a deeply confused process of tech policymaking that involved ample risks both for India’s citizens and the government.

The Wire also sent detailed queries to the office of Nitin Gadkari, the Union minister for road transport and highways, the secretary and other officials. None of them responded despite repeated reminders.

Also read: How Data in India Went From Being a Tool of Economic Planning To Big Data Aggregation

Genesis

The premature death of the Bulk Data Sharing Policy led us to the skeletons of one of the first deals signed by the Modi government that let a company gain access to bulk data. 

On April 25, 2014, barely weeks before the UPA government of Manmohan Singh demitted office, the ministry approved a scheme for sharing data in the National Register with law enforcement agencies and insurance companies. 

Enter Fast Lane Automotive, a company with a UK-based parent firm and which currently has 46% foreign holding, as per its filings of FY 2020. It proposed a deal to the government in which it would buy vehicle data of the entire country through an agreement that mirrored the one it had signed with the UK government. The pricing too, was arrived at on the basis of the fee charged by the British government.

Explaining the business importance of such data, Saranna, in response to our queries, said, “All sophisticated stakeholders in the automotive industry need such ‘anonymised’ vehicular data to have measurement metrics for their production, dealer management, distribution and supply chains so as to make informed, scientific and data-backed decisions, business plans and strategies.”

A month into the discussion, the government changed and the Bharatiya Janata Party (BJP) came to power. The new administration moved quickly. 

On June 20, 2014, the ministry proposed to share the Vahan and Sarathi databases – the former houses vehicle registration details while the latter has driving licence data – to buyers at a price of Rs 1 crore a year, much lower than the Rs 3 crore set in the Bulk Data Sharing Policy that came later.

NIC bypassed

In 2014, the transport ministry requested the Ministry of Law and Justice to approve a tripartite agreement between the ministry, FLA and NIC.

NIC’s role was to ensure transfer of data and prevent unauthorised use. However, the ministry appears to have sidelined NIC while signing the contract, records show.

Correspondence between the ministry and the department of legal affairs shows no similar agreement was ever executed. By August 7, 2014, the draft agreement was vetted, changed and approved. A file note by the joint secretary of the transport wing on August 8 said, “Start accepting applications, signing of contract and giving permission for sharing of anonymised bulk data.” The same day, the ministry received an application from Fast Lane Automotive for signing the agreement.

The ministry, however, quickly grew impatient with NIC’s objections.

On September 15, the ministry pointed out, “It has been observed that there has been a considerable delay in providing the approval for servicing of the contract by NIC.” The ministry accepted Fast Lane’s contention that NIC was an intermediary and Ministry of Road Transport and Highways was the owner of data.

For some reason, the ministry did not forward  the proposal to its integrated finance division (IFD), its finance wing, before inking the pact.

When it did, months after the data supply began, red flags went up which remained unaddressed for long. Officials rang alarm bells over the lack of price discovery, and one joint secretary noted in a file that there was another application for bulk data but suggested putting a pricing mechanism in place first.

On September 19, three days after the government inked the deal with Fast Lane, the ministry asked NIC to sign the contract and start supplying data as it has deposited the payment in the State Bank of India.

Also read: An Immersive Theatre Piece on How Misuse of Citizens’ Data Creates Social Hierarchies

Price discovery

Officials who reviewed the contract were puzzled by how the ministry arrived at the figure of Rs 1 crore as the fee, a question that kept bubbling up in file notings. The documents reveal the ministry based the deal on the sample contract developed by the UK’s department of transport, which pegged the rate for supply of bulk data at £96,000 plus VAT (value-added tax) for a year (around Rs 1 crore). 

It is not explained why the Indian government would copy-paste the British contract — which FLA’s parent company is a signatory to — despite the UK’s auto sector market and vehicle population being smaller than India’s by at least 155 million.

A bit of math here. In 2014, though there were 191 million registered vehicles in India, the ministry had digitised details of only 49 million vehicles registered between 2011 and 2014. And at Rs 1 crore for 49 million vehicles, the government sold each vehicle’s detail at 20 paise. And if they had managed to digitise the details of all vehicles in India, the selling price would slide to 5 paise. There could be further downswing if licence details are added.

A year after the contract went live, the finance wing was consulted for the first time – on granting FLA a grace period. 

The finance wing hinted at its displeasure in the note: “It is presumed that since policy has already been framed, various issues like right to privacy and misuse of data, possibility of floating query/tender in the market for sharing of data in order to appreciate better price have been considered and got approved by competent authority.”

The joint secretary in the transport wing, Abhay Damle, noted in a file on March 23, 2016: “The rate was fixed at Rs 1 crore without taking IFD’s (finance wing) views. Further, the contract allows MoRTH to increase charges limited by CPI increase. Hence, price discovery does not seem to have been made. With regards to benefits to the government, no substantial benefit seems to have been accrued to MoRTH for Vahan/Sarathi data. No reports have been shared with MoRTH by the customer.”

He was responding to the ministry’s demand to ‘finalise’ its data sharing procedure.

Further, he added, “Contract needs to be redrafted to make it balanced as the present draft is heavily in favour of the customer.”

The official also noted, “There is another application for sharing of bulk data. But to go ahead with this, we initially may seek the opinion of IFD regarding price discovery.” Multiple firms had written to the ministry for access to data in the Vahan database.


But price discovery isn’t the only hot-button.

Kodali said, “Even if you look at the records for digitisation of Vahan, accessed through RTI, what you find is that the Centre did not even ask the states before sharing the data with private firms. Transport is a state subject. The data with MoRTH was collected from RTOs (regional transport offices) across states but none of the states’ permission was sought for the scheme. The states share the data as per regulation”.

When asked by Telugu Desam Party (TDP) MP Kesineni Srinivas if the funds earned through providing access to Vahan and Sarathi databases would be shared with the states, Union Minister for Road Transport and Highways Nitin Gadkari informed parliament, “No, it is not shared with the states.”

Also read: Book Review: The Many Lives of Data in India

Grace period

If pricing was the cake, the grace period given was the icing on the contract. Under this, the firm would get data access for free for a special window.

Documents show several officials in the ministry and the NIC raised concerns about granting the company a ‘grace period’. The company had asked for it claiming it hadn’t been able to leverage data for commercial use due to the absence of data from one out of the 28 states, Andhra Pradesh.

Saranna responded to a query on this to say, “FLA was never treated favourably as claimed by you.”

He added, “The period was granted in lieu of FLA’s waiver of certain acts of non-performance and delays by the ministry in respect of the contract. This was appropriately recorded in correspondence between FLA and the ministry.”

The Wire reviewed this correspondence as part of the government documents received under RTI Act.

This correspondence shows that the company requested the ministry to push the start of the one-year countdown to May 1, 2015 from September 16, 2014, which means an additional seven months of free bulk data supply in the same contract. 

NIC officials housed in the road transport ministry were against granting a grace period since the supply was affected due to bifurcation of Andhra Pradesh, which it termed “unforeseen circumstances”. But Fast Lane persisted, and the ministry overruled NIC officials.

“Since this contract is the first of its kind and till date no other company has approached this ministry for bulk data, we may consider their request,” the joint secretary, transport, wrote in September. 

For the first time, the file was sent to the finance wing for finalising a formula for grace period. By now the clamour within the ministry against the deal had grown louder. In a file noting on October 12, 2015, the joint secretary and financial advisor (JS & FA) in the finance department of the ministry asked for the “basis for selection of this particular company for sharing of bulk data and fee of Rs 1 crore.” 

“Basis for granting grace period is quality of data but in agreement and contract, quality of data is not mentioned,” the officer said in the file.

On November 2, 2015, the deputy secretary of motor vehicles, DS (MVL), Irene Cherian said, “Since NIC says it has ensured data supply from day 1 and disruptions have occurred due to unforeseen circumstances, grace period may not be granted to FLA.”

On the same day, joint secretary Niraj Verma noted, “Request for grace period may be rejected.”

Despite these objections, the road transport and highways secretary scribbled on the file: “Imp Q is whether we have fulfilled our commitment under the contract, and if so, by what data.”

A few days later, the ministry granted the company a grace period till November 30, 2015 for a contract that expired on September 18, 2015.

Timeline

Date Event
25 – 04 – 2014 Transport ministry officials decide to share entire data stored in National Registry for Transport on the basis of Fast Lane’s proposal
15 – 09 -2014 Fast Lane sends transport ministry a letter saying NIC is ‘just an intermediary’ after it delays signing the contract
16 – 09 – 2014 Bulk Data Sharing contract is signed between the ministry and Fast Lane. There is no auction for discovering market price of the data and Fast Lane gets exclusive access to public information. NIC is bypassed.
20 – 04 -2015 Fast Lane sends letter to transport ministry requesting ministry to postpone the commencement of contract to 01/05/2015; says it hasn’t been able to leverage data for commercial use because of gaps in data
20 – 08 – 2015 NIC refuses to accept any fault in data sharing; objects against grant of any grace period to the company
03 – 09 -2015 Matter referred to the finance wing for the first time. It flags issues of possible ‘misuse of data’ and ‘price discovery’.
12 – 10 – 2015 JS & FA ask ministry to explain basis for selection of Fast Lane for sharing bulk data and for the grant of grace period
02 – 11 – 2015 DS (MVL) raises objection against granting the firm any grace period. JS (EIC) echoes the same concern.
24 – 11 – 2015 Transport ministry overrules all these objections, decides to grant Fast Lane a grace period till 30/11/2015 for a contract which expired on 18/09/2015
17 – 02 – 2016 Transport ministry asks NIC to cut off supply of data to Fast Lane over ‘security issues’ and ‘data leakage possibilities’
2016-2019 Multiple meetings held to decide on procedure for sharing bulk data with interested entities
30 – 05 – 2018 Officials decide contract with Fast Lane be officially terminated
March 2019 Government launches Bulk Data Sharing Policy. 
04 – 06 – 2020 Government rescinds Bulk Data Sharing Policy over ‘privacy issues’
11 – 02 – 2021 Nitin Gadkari, in parliament, says private firms who have accessed Vahan and Sarathi data will not be asked to delete it

Also read: How Poor Data Protection Can Endanger Communities During Communal Riots

Data supply nixed after NIC raised concerns

The ministry paused bulk data supply to Fast Lane in February 2016 following NIC’s opinion that bulk data should not be shared with private firms due to privacy and security concerns.

The company’s CEO, Nirmal Singh Saranna, wrote a series of letters to the ministry requesting the resumption of data supply. He said the company was suffering losses after the ministry turned the data tap off.

“After investing over 10 years of hard work and life savings, we are faced with a situation where we do not have the basis of our business needs – anonymised vehicle registration data from the National Register – despite a valid contract of September 2014 for an annual fee of Rs 1 crore payable and paid by us to MoRTH. The contract which commenced in September 2014 had been discontinued by MoRTH without any explanation or notice in February 2016 and there is no further release of data to us,” he told The Wire over email.

For much of 2018, the ministry considered making vehicle registration data public. This was a policy proposal echoed by Niti Aayog CEO Amitabh Kant in October for all such data that the government holds. 

It was only in 2018 – four years after signing the contract with Fast Lane – that the ministry decided to spread the word and invite other buyers. 

An official noted: “If any other private company or organisation desires to have anonymised bulk data, they may also be provided the same at the same rate and conditions as in the case of M/s Fast Lane.” He further noted, “A notice to this effect may be uploaded on [the] ministry’s website.”

In January 2019, the ministry held meetings to finalise a Bulk Data Sharing policy, which would eventually be launched in March. On March 18, Fast Lane once again applied for bulk data supply. The price, this time, was Rs 3 crore.

On 30 July 2019, the finance wing once again questioned the ministry over the price. It also asked MoRTH if its concurrence had been sought before finalising the policy. The ministry responded: “A sub-committee has worked out the details and proposed the policy for bulk data sharing. After detailed discussion, draft policy was put for concurrence of AS & FA which was later approved by Hon’ble Minister (RTH).”

Almost a year later, on June 4, 2020, the ministry pulled the plug on its Bulk Data Sharing policy. The official reason was that the policy was scrapped over data privacy concerns.

Saranna continues to assert that the government did not do any favour to his company. The government remains silent. 

Read FLA CEO Nirmal Singh Saranna’s full response to The Wire’s queries below.

Nirmal Singh Saranna response letter by The Wire on Scribd

Shreegireesh Jalihal is the Assistant Editor of Reporters Collective.