The Great Rafale Mystery

Transparency that Modi boasts of is missing from his conduct in Rafale controversy

By Asit Manohar

It was disheartening to see opposition parties, including Indian National Congress, disrupting the Prime Minister Narendra Modi’s speech in the Lok Sabha when he stood to speak on the Presidential Speech delivered at the beginning of the Budget Session. The incident was more painful because it took place in presence of Congress President Rahul Gandhi — whom the Congress Party has pitched in the 2019 poll fray as their Prime Ministerial candidate. In his around ninety minute speech, Modi tear apart into Congress party’s allegations regarding job creation, mismanagement of the national economy, action against corruption, rising bank NPA but it was ironic to see PM choosing not to utter a single word on mystery behind Rafale Deal. The Prime Minister of India found it lesser important to share the nitty-gritty of the deal with the people of India — whom he boasts to represent citing 125 crore national citizens. But, what Modi thinks is not what the nation thinks. For humble notice to the Prime Minister and the Defense Minister along with cabinet committee, it’s their duty to clear the air at a time when the principal opposition party president has alleged corruption charges against the Prime Minister for receiving kickbacks. Both Prime Minister and the Defense Minister not choosing to answer the allegations over Rafale Deal have done great disservice to Indian Parliamentary system and to the national democratic set-up.

The details of the Rafale Deal, under which the French company will supply India with 36 aircraft, cannot be revealed as they are classified, informed Defense Minister Nirmala Sitharaman to the nation through Indian parliament. Information on cost per aircraft was protected under “Article 10” of the inter-governmental deal signed by France and India, she said in her statement. Information on the “offset deal” with private companies in India, involving investments in terms of transfer of technology and maintenance, had not been provided by France yet.

Sitharaman was answering questions put to her by the Opposition in Rajya Sabha. Not surprisingly, the Congress is now on the warpath, with party president Rahul Gandhi alleging the deal was a scam. More surprisingly, the defence minister’s reply is in stark contrast to her own assurances last year. Then, she had said the government would reveal the costs and the specific figures, because “public money” was involved, and the difference between the United Progressive Alliance and the National Democratic Alliance was “transparency”. Within months, the government has gone back on its own word.

Negotiations on the Rafale deal, which the current government inherited from the Congress era, have been controversial from the start. Under the Narendra Modi government, several questions remain. First, the opposition has accused the government of buying overpriced aircraft, even though the Bharatiya Janata Party had claimed the government led by it had got a better deal. The Congress-led government had negotiated for 126 aircraft, 18 of which would be ready to fly while the rest would be manufactured by Hindustan Aeronautics Limited with the help of Dassault. If remarks by then Defence Minister Manohar Parrikar made in 2015 are to be believed, the figure quoted for that deal had been Rs 90,000 crore.

But by 2015, the Congress-era negotiations were dead. Prime Minister Narendra Modi scaled down the contract to the purchase of 36 ready to fly aircraft and the new deal amounted to Rs 58,000 crore. Estimates suggest that the government is now effectively paying Rs 1,063 crore per aircraft, as opposed to Rs 714 crore under the deal proposed earlier, the difference being attributed to the “high end” aircraft now being purchased. Unlike now when the government is citing a confidentiality clause, on September 23, 2016, the government had stated in a written reply in Lok Sabha that “the cost of each Rafale aircraft is approximately Rs 670 crore.” But the cost per unit go up to almost Rs 1,640 crore if the overall deal is taken into account, with this difference sought to be explained as extra costs because of the inclusion of a “deadly weapons package, all spares and costs for 75 percent fleet availability and performance-based logistics support for five years”. The government has also been accused of rejecting a much cheaper deal offered by Eurofighter Typhoon. Since it has not revealed the particulars of the current contract, there is no way of knowing.

Second, questions have been raised about the procedure followed in announcing the deal. It seems to have been a unilateral commitment made by Modi during a visit to France in 2015, without any consultation with the relevant cabinet bodies or ministries. The government later claimed that defence procurement procedures allow for regular protocol to be by-passed on strategic grounds. But even these transactions must be cleared by the competent financial authority, in this case, the cabinet committee for security, which only came into the picture later.

Third, the Congress alleged that Reliance Defence, a private company, had been favoured by the government and Hindustan Aeronautics Limited jettisoned from the offset deal, giving rise to a cost difference. The government is taciturn about the details of these transactions as well. As observers have pointed out, the details of an inter-governmental contract may be classified but it is not clear why French industrial suppliers cannot disclose how they have distributed money among private partners in India.

These questions point to suspicions of nepotism at best and outright pilfering of public money at worst. The transparency that the Modi government boasts of is entirely missing from the way it has conducted the deal. If the National Democratic Alliance is to prove it does business differently from its predecessor, it needs to reveal the details of the Rafale contract.