Hmm, sorry not sure why.
I could verify my wife's paypal account using HDFC VCC.
One of my friends whos running a software firm verified two account - one his personal and second -for his company. Both using HDFC VCC and they worked perfect.
I don't think HDFC VCC's work with paypal anymore. It use to work for me before you make payments to myself using donation button, but now it's not accepting HDFC VCC's in any form, not even adding and verifying to the account.
As far as what I've heard from Customer care, is due to lot of misuse, HDFC has blocked their prepaid gift cards from being used for online transactions anymore, and my guess is that they could have very well blocked Netsafe cards for Paypal as well.