Editorial

Hundred-fold corruption under BJP Rule : A factual enquiry into Rafale fighter jet deal will save nation

Corruption in India is an issue which affects the economy of central, state and local government agencies in many ways. Corruption was blamed by BJP earlier for stunting the economy of India, while BJP by its conspired corruption, it has become “Corruptive King” in its mal-admiration in promoting Hindutwa by eating away Indian economy and halting her growth.

A study conducted by Transparency International in 2005 recorded that more than 62% of Indians had at some point or another paid a bribe to a public official to get a job done. And Narendra Modi government is not an exception.

In 2008, another report showed that about 50% of Indians had first hand experience of paying bribes or using contacts to get services performed by public offices, however, in 2019 their Corruption Perceptions Index ranked the country 80th place out of 180, reflecting steady increase in perception of organised and conspired corruption among people taking lessons from the BJP’s corrupt practices and Gujarati favoritism.

The largest contributors to corruption are entitlement programs and social spending schemes enacted by the Indian government.

Examples include the Mahatma Gandhi National Rural Employment Guarantee Act and the National Rural Health Mission. Other areas of corruption include India’s trucking industry which is forced to pay billions of rupees in bribes annually to numerous regulatory and police stops on interstate highways.

In the process media too has become corrupt and started playing and dancing fo the tune of the Governance for illegal benefits. However, the media has widely published allegations of corrupt Indian citizens stashing millions of rupees in Swiss banks. Swiss authorities denied these allegations, which were later proven in 2015–2016 but in vain.

The causes of corruption in India include excessive regulations, complicated tax and licensing systems, numerous government departments with opaque bureaucracy and discretionary powers, monopoly of government controlled institutions on certain goods and services delivery, and the lack of transparent laws and processes.

There are significant variations in the level of corruption and in the government’s efforts to reduce corruption across different areas of India, consequential governances failed after the personal or party benefits superseded the national benefits.

The Rafale deal controversy is a public controversy in India related to the purchase of 36 multirole fighter aircraft for a price estimated at €7.8 billion by the Defence Ministry of India from France’s Dassault Aviation.

The origin of the deal lies in the Indian MMRCA competition, a multi-billion dollar contract to supply 126 multi-role combat aircraft to the Indian Air Force (IAF).

Though Supreme Court had an opportunity to set the law into motion, the Supreme Court without acting impersonation, erred to uphold its superior commitment to the nation in bringing the crucial facts to book, but for the personal and post retirement advantage of corrupt judge, the Rafale deal, it side lines the reference, stating that no irregularities or corruption have been found.

The Supreme Court delivered the final legal judgement on the controversy on 14 November 2019 and dismissed all the petitions seeking a review of its December 2018 judgement.

To review the BJP’s modus operandi, it is necessary to do reserach from its origination point.

On 31 January 2012, the Indian Ministry of Defence announced that Dassault Rafale had won the MMRCA competition to supply the Indian Air Force with 126 aircraft, along with an option for 63 additional aircraft.

The first 18 aircraft were to be supplied by Dassault Aviation fully built and the remaining 108 aircraft were to be manufactured under license by Hindustan Aeronautics Limited (HAL) with a transfer of technology from Dassault.

Rafale was chosen as the lowest bidder based on life-cycle cost, which is a combination of cost of acquisition, operating cost over a duration of 40 years and cost of transfer of technology.

The negotiations with Dassault dragged on due to disagreements on warranty for aircraft produced by HAL. India wanted Dassault to ensure the quality of aircraft produced by HAL, but Dassault refused to do so.

In January 2014, it was reported that the cost of the deal had escalated to $30 billion (₹1,86,000 crore), with each aircraft costing $120 million (₹746 crore).

In February 2014, the then defence minister A. K. Antony said that the procedure of calculation of life-cycle cost was being re-examined and the contract could not be signed in the fiscal year 2013-14 due to budgetary constraints. In March 2014, HAL and Dassault signed a work share agreement to manage licensed manufacture.

Dirty tactics to loot exchequor started after the Indian general election in April–May 2014, the National Democratic Alliance led by Bharatiya Janata Party took control of the government from the United Progressive Alliance led by the Indian National Congress.

As disagreements over cost and warranty for aircraft produced by HAL continued, defence minister Manohar Parrikar said that the Sukhoi Su-30MKI could be acquired as an alternative to Rafale.

The then, Air Chief Marshal Arup Raha disagreed, saying that the Su-30MKI and Rafale had different capabilities, they were not interchangeable.

In February 2015, it was reported that the Rafale purchase was headed for cancellation as it had been misjudged to be the lowest bidder due to deficiencies in Dassault’s bid. On 25 March 2015, Dassault’s CEO Éric Trappier said that although the deal was taking time, it was “95 percent completed”.

During an official visit to France in April 2015, prime minister Narendra Modi announced that India would acquire 36 fully built Rafales citing “critical operational necessity”.

In July 2015, defence minister Manohar Parrikar informed the Rajya Sabha that the tender for 126 aircraft had been withdrawn and negotiations for 36 aircraft had begun. In January 2016, India and France signed a memorandum of understanding (MoU) for acquisition of 36 aircraft without finalising the financial terms of the acquisition.

In May 2016, the two sides arrived at a figure of €7.87 billion (₹58,891 crore) for the agreement, compared to €11.8 billion quoted in April 2015 and €8.6 billion quoted in January 2016.

The decrease in price was due to a change in escalation formula from a fixed 3.9% to a floating rate linked to European inflation indices along with a cap of 3.5%.

Jean-Yves Le Drian and Manohar Parrikar signing the Rafale inter-governmental agreement in September 2016. In September 2016, India and France signed an inter-governmental agreement (IGA) for the acquisition of 36 aircraft following clearance from the Indian Cabinet Committee on Security. The agreement provided for many components superior to those in the original deal, in particular the weapons package. It was reported that India would acquire 28 single-seat aircraft at a cost of €91.1 million (₹681.7 crore) each and 8 dual-seat aircraft at a cost of €94 million (₹703.4 crore) each.

The deal also included tailor-made enhancements for the Indian Air Force at a cost of €1.8 billion (₹13,470 crore), a weapons package costing €710 million (₹5,313 crore) and a performance-based logistics agreement at a cost of €353 million (₹2,641 crore).

The weaponry procured included missiles such as MICA and Meteor beyond-visual-range air-to-air missiles and SCALP air-to-ground cruise missile. The India-specific enhancements

included, among the dozen or so enhancements, the integration of an Israeli-made helmet-mounted display (HMD), radar warning receivers and low-band jammers.

The agreement included a 50% “offset clause”, which required the companies involved in the agreement—primarily Dassault, Thales, Safran and MBDA—to invest 50% of the contract value (approximately €3.9 billion or ₹30,000 crore) back into India, with 30% of the total (approximately €1.2 billion or ₹9,000 crore) reserved for the Defence Research and Development Organisation (DRDO).

Of this 50%, 74% (approximately €2.9 billion or ₹22,200 crore) was to come from purchase of goods and services from India, which was expected to bolster the government’s efforts to promote Indian defence equipment manufacturers.

On 3 October 2016, incapable Reliance Group emerged on favouritsm to share profits mutually between BJP and Reliance, accordingly Reliance and Dassault Aviation issued a joint statement announcing the creation of a 51:49 joint venture named Dassault Reliance Aerospace Limited (DRAL) to focus on aero structures, electronics and engine components as well as to foster research and development projects under the “Indigenously Designed Developed and Manufactured” (IDDM) initiative.

Dassault intended to invest in excess of €100 million in the joint venture as part of its offset obligations. The joint venture was to manufacture components for Legacy Falcon 2000 series of jets such as the nose, cockpit and doors at the DRAL facility in Nagpur starting from January 2018.

Allegations of price escalation : The day after the signing of IGA between France and India, public and opposition Congress demanded for details of the agreement to be made public and questioned if there was an escalation of per-aircraft cost from ₹715 crore to ₹1,600 crore.

A couple of months later in November 2016, minister of state for defence Subhash Bhamre informed the Lok Sabha that the cost of each Rafale aircraft acquired under the IGA was approximately ₹670 crore.

Similarly nationalist and opposition Congress in November 2017, alleged that procurement procedures were bypassed in acquisition of Rafale and questioned, if there was an escalation of per-aircraft cost from ₹526.1 crore to ₹1,570 crore.

Then Defence Minister Nirmala Sitharaman came to the resue of the corrupt Government and denied the allegations of procedural wrongdoing and said that approval from Cabinet Committee on Security had been obtained before signing of IGA. She said that the prices could not be compared as the tender for 126 aircraft and the agreement for 36 aircraft had different requirements.

Air Chief Marshal Birender Singh Dhanoa also denied the allegations and said that the agreement for 36 aircraft was signed with better terms than the one that was being negotiated under MMRCA tender. These all happened under the corpet exercise of the Top Secrecy. French government officials also rejected the allegations of violation of procurement procedures.

In an interview, former chief of air staff Arup Raha said that Defence Procurement Procedure allows for government-to-government procurement and there was no procedural bypass in signing of the IGA.

He added that the agreement for 36 aircraft was cheaper than the previous proposal and had a better maintenance and weapons package including provisions for training, a better performance-based logistics package and two aircraft maintenance and overhaul facilities that were not present in earlier proposal. He said that most of the confusion over cost was due to comparison of prices from different base years and comparison of different deliverables.

Allegations of favouritism : Since Narendra Modi was in love for money for his Gujrati friend, Modi and Hollande had an interaction with Indo-French CEO Forum on 10 April 2015.

Anil Ambani participated in the deal, he can be seen in the second row, wearing headphones. In the process, the famous HAL was bypassed in the Rafale contract and the nation questioned the presence of Anil Ambani in France during Modi’s announcement to acquire 36 fully built aircraft.

It was also alleged that the necessary government approvals were not obtained before the formation of joint venture between Dassault Aviation and Reliance Defence Limited, this is the true face of nationalism by Narendra Modi. Thick corruption skinned PM Narendra Modi deliberately ignored the nation’s accusation that Indian prime minister Narendra Modi of dropping the requirement of licensed manufacture by the state-owned Hindustan Aeronautics Limited to ensure that the privately owned Reliance Defence Limited obtained an offset contract from Dassault.

Anil Ambani’s Reliance Defence Limited denied the allegations by releasing a statement that he was present as a member of Indo-French CEO Forum. The statement added that no government approvals were required for foreign investments of up to 49%. Reliance also threatened to sue those who levelled the allegations if they were not withdrawn.

Defence minister Nirmala Sitharaman denied the allegations and said that transfer of technology to HAL would not be economically feasible in a smaller contract for 36 aircraft, which was an emergency purchase to make up for a decade-long delay.

She said that no government approvals were required for the joint venture between two private companies. Air Chief Marshal Birender Singh Dhanoa also denied the allegations and added that technology would be transferred to DRDO. French government officials also rejected the allegations, saying that the offset contracts would be handed by four companies including Dassault and 500 companies would benefit in total.

In February 2018, in response to demands for details of the agreement to be made public, Nirmala Sitharaman said that the details were classified under a security agreement signed by Indian and French governments in 2008.

She said that no state-owned or privately owned companies were included in the IGA. Rahul Gandhi alleged that the secrecy over pricing was evidence of a scam. While the Eurofighter GmbH had reduced the price of its Typhoon jet by 20% and questioned why it was not considered.

In response, the Ministry of Defence released a statement saying that the parliament had been informed with approximate cost of aircraft and revealing item-wise costs would compromise national security and violate the 2008 agreement. The statement went on to say that Dassault Aviation had not selected its offset partners yet and it was free to do so. On the Eurofighter question, the statement said that the previous government too had rejected an unsolicited bid from Eurofighter that was

made a few days after the lowest bidder was announced in 2012. Finance minister and former defence minister Arun Jaitley defended the government’s stand by providing examples of two instances where ministers under the previous UPA government had claimed that details of arms expenditure was classified and said that there were 15 such instances in total. Rahul Gandhi responded by presenting examples of three instances where ministers under the UPA government had provided pricing of defence deals.

The newly formed National Democratic Party President MA Mujeeb joined the Congress in its demands for details of the purchase to be made public. Aam Aadmi Party and Communist Party of India (Marx) too alleged that there was corruption involved in the Rafale deal and repeated the allegations of price escalation.

In August 2018, it was reprted in a section of media that Reliance Entertainment funded a film produced by former president of France François Hollande’s partner Julie Gayet when Rafale negotiations were ongoing. When asked to comment on this, Hollande told Mediapart that the Indian government had proposed the name of Reliance and that they had no choice in the matter.

He added that due to this, there was no reason for Reliance to do him any favours. He said that Kev Adams negotiated the funding for the film and Gayet said that Adam’s talent agency My Family had approached and secured funding from Reliance and she was merely presented with Reliance as a partner after the fact.

The French Ministry of Europe and Foreign Affairs contradicted Hollande by releasing a statement saying that the French companies had “full freedom” to choose Indian partners for executing their offset obligations and that French companies had utilized the freedom to sign agreements with multiple Indian companies. Dassault also released

a statement saying that the decision to partner with Reliance was entirely its own and that it had already partnered with other multiple Indian firms too.Indian Ministry of Defence too released a statement saying that neither the Indian nor the French government had any involvement in Dassault’s decision to partner with Reliance. Hollande later reiterated that the French government did not choose Reliance.

His spokesperson said that Hollande was referring to the new deal for 36 aircraft when he said that the Indian government made the proposal. When asked by Agence France-Presse if the Indian government had pressured Dassault to partner with Reliance, he said that he was unaware and redirected the question to Dassault. Reliance Entertainment said that it had no relationship with Julie Gayet or her company Rogue International. It added that the financing partner was Visvires Capital and the investment was limited to 15% of the film’s budget. The company’s statement said that the investment was made six months after Hollande stepped down.

During in campaigning for 2017 Gujarat Legislative Assembly election, Congress Vice President Rahul Gandhi raised the issue of Rafale deal to attack Narendra Modi. He repeated the allegations of price escalation and favouritism towards Reliance Defence Limited.

Former defence minister Manohar Parrikar justified the costs, saying that the cost of the aircraft is often eclipsed by the cost of equipment required to make it combat-ready. He said that the new agreement includes development costs for integration of a helmet-mounted display and a serviceability agreement. He blamed his predecessor in the previous United Progressive Alliance government, A. K. Antony for delaying the acquisition by creating uncertainty over the lowest bidder.

It may be recalled that in December 2017, Nirmala Sitharaman mislead the Rajya Sabha that the IGA had better aircraft pricing along with an improved maintenance package and a faster delivery schedule, although she admitted that a direct comparison of prices was not possible due to differences in deliverables. She added that negotiations under MMRCA tender had reached a deadlock and the 36 aircraft were being procured to meet a critical necessity of the Indian Air Force.

National Democratic Party (NDP) has demanded an enquiry into the Rafale fighter jet deal after a French media report claimed that Euro 1.1 million was paid to a “middleman” by the aircraft manufacturer. The BJP which is amajor beneficiarey in Rafael deal, has already denied the allegation in the French media report as baseless.

The current revelation in a French media portal that one million euros were paid to a ‘middleman’ in the deal to buy 36 Rafale jets has once again raised the issue of kickbacks and other illegal payments in the Rafale deal. The report is based on an analysis of the Dassault company’s accounts of 2017.

The dogged refusal by the Narendra Modi government to order a probe into the Rafale deal raises suspicion that it has something to hide in the matter.

The CAG audit report could not obviously look into the issue of illegal payments, it said. It demanded a high-level investigation into the cancellation of an earlier order and the issuance of a fresh order for 36 fighter jets.

According to Mediapart, its report was based on an investigation by the country’s anti-corruption agency Agence Francaise Anticorruption (AFA), which found that after inking the deal, payment was made by Dassault Aviation, the manufacturer of Rafale fighter jets.

The manufacturer has not been able to answer the queries posed by the AFA.