EPW Editorial


In the run-up to the 2019 Lok Sabha general election, the Rafale issue has galvanised the opposition parties, which are seeking to force Anil Ambani and the government to take responsibility for the irregularities surrounding the deal. On the other hand, spokespersons of the government are making every effort to disentangle it from these irregularities. However, recent revelations have embroiled the government further in the controversy, which reeks of corruption and malfeasance.


In April 2015, Ambani’s Reliance Defence secured a share in a contract for the Indian Air Force’s (IAF) acquisition of a number of Rafale jets, manufactured by Dassault Aviation of France. It was instant pay-off for a firm that had been registered just two weeks prior to the deal. The contract itself was sprung on the public with all the drama of a conjuration. Prime Minister Narendra Modi was wrapping up a visit to France, as part of his outreach to major world powers during the first year of his term. The stated intent of this outreach was a restructuring of the context of India’s external relations. As India’s foreign secretary, S Jaishankar, explained just ahead of the visit, it was a “leadership level visit” which would not get mired in “deep details of ongoing defence contracts.”


The predecessor government, after complex negotiations originating in a 2007 “request for proposals” (RFP), had struck a deal with Dassault, involving the acquisition of 18 fighter jets fully configured with appropriate weapon systems, and a further plan for the manufacture of 108 aircraft in association with India’s public sector enterprise, Hindustan Aeronautics Ltd (HAL). Elaborate price negotiations had run into some complications, not unexpected for a complex deal involving outright purchase and a technology transfer deal under which HAL would contribute roughly 70% in value to the manufacture of six times that number of aircraft.


Within two days of the foreign secretary’s explicit disavowal of any intent to allow these complex details into the “big picture” talks, the Indian Prime Minister announced an “Inter-Governmental Agreement” (IGA) with France for 36 aircraft in “flyaway condition.” The terms, as a joint statement put it, “would be better than conveyed by Dassault Aviation as part of a separate process underway.”


The numbers, needless to say, simply did not add up. Against the multiple promises of the deal under negotiation in the “separate process,” the IGA offered nothing more than an outright purchase. The RFP floated in 2007 had spoken of a total cost of roughly ? 42,000 crore for the acquisition of 126 jets, or just under ? 350 crore for every aircraft. That may have been wishful thinking, though, in April 2015, then Defence Minister Manohar Parrikar spoke of a unit price of ? 715 crore for every aircraft under the older deal, superseded by the IGA by then. Despite protestations that the prices agreed under the IGA could not be disclosed because of security concerns, Minister of State for Defence Subhash Bhamre let it slip in the Lok Sabha in November 2016 that each aircraft would cost around ? 670 crore. This, in turn, was in flagrant contradiction to the price of ? 1,660 crore mentioned in a February 2017 media release by Dassault and Reliance Defence.


With first deliveries of the aircraft not having commenced, there is now well-founded doubt that the time schedule will be met. More embarrassments have meanwhile piled up and a wide array of public institutions and agencies have been implicated in the efforts to cover up a trail of suspicious government decisions. In August 2018, civil rights lawyer Prashant Bhushan, in association with Arun Shourie and Yashwant Sinha—two political luminaries who have taken leave of the thankless job of defending the Modi regime through thick and thin—released a detailed fact sheet on the Rafale deal. Assembled in one place in chronological sequence, the facts unambiguously pointed towards a deal deeply mired in possible malfeasance.


A petition before the Supreme Court calling for an investigation by the Central Bureau of Investigation (CBI) led to much chopping and changing of senior personnel in the premier police agency, triggering an unseemly internal war among the top cadre. In endorsing the summary dismissal of a top CBI official just as he was taking the matter up, a senior judge of the Supreme Court revealed an unhealthy susceptibility towards the offer of a post-retirement posting. In ruling, finally, that it would not order a CBI investigation, the Court, most embarrassingly, called upon the authority of an inquiry by the Comptroller and Auditor General of India (CAG) that had not even commenced, let alone been completed.


When the CAG report was finally submitted, it seemed to endorse the choice of the Rafale jet on grounds of economy and costs. But, this claim was already being undermined by media disclosures of defence ministry documents suggesting a 41% escalation in the cost of each aircraft after the IGA became operational. Memoranda drafted by ministry officials also suggested a serious weakening of India’s negotiating posture as a result of intrusive attentions of the office of the Prime Minister.


In a practised manoeuvre, the government has pressed down hard on the theme of national security, which it claims is its exclusive preserve. The old trope of “anti-national activity” has been deployed afresh to tar political opponents. But, the stench of corruption simply refuses to go away.

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