Rafale Scam: If the Congress was wrong, BJP would have set the record straight

"On a warm Delhi evening on April 3, 2015, Defence Minister Manohar Parrikar had left his South Block office and was driving to catch his flight to Goa, when his mobile phone received an incoming call from Prime Minister's Office. Could he come in urgently, an official asked, the PM would like to talk briefly."

“When Parrikar reached the PMO, Prime Minister Narendra Modi sprang a bombshell. Parrikar was told that, on Modi's forthcoming trip to Paris, he and French President Francois Hollande would announce an agreement for India to buy 36 Rafale fighters. During Modi's nine-day tour of France, Germany and Canada, Parrikar would have to manage the media and field the inevitable questions... Over the next week, Parrikar batted loyally for the PM, publicly defending a decision he neither understood nor agreed with, that was taken over his head, and that senior officials of defence (MoD) officials warned him would be difficult to defend."

The above description is not a concoction; it is not anyone's figment of imagination. It is an excerpt from an analytical piece by eminent defence analyst Ajai Shukla published in the most credible Indian pink daily, Business Standard. (September 23, 2015)

What does this analysis convey? Clearly, the Prime Minister struck a hush-hush defence deal with the French government to which even the Defence Minister of India was not clued in.

Who then negotiated the deal for the Prime Minister of India with the French government, if not the defence ministry? One possible answer could be our external affairs ministry officials dealing with defence and western Europe, the foreign secretary being the nodal point. But the fact is that the foreign secretary was as clueless as the defence minister about the secret Rafale deal even the day before the Prime Minister left for France.

On April 8, 2015, then foreign secretary S Jaishankar addressed a customary press briefing. When he was specifically asked if Rafale was part of PM's agenda for discussion, Jaishankar's response was a categorical negative. "We do not mix up leadership level visits with deep details of ongoing defence contracts. That is on a different track. A leadership visit usually looks at the big picture issues even in the security field."

So the Prime Minister would take the larger view, not get bogged down in specific deals, the foreign secretary asserted. To the persisting journalists, Jaishankar offered this comment: "In terms of Rafale, my understanding is that there are discussions under way between the French company, our Ministry of Defence, the HAL which is involved in this. These are ongoing discussions."

Here was a foreign secretary who was not hiding facts from the foreign correspondents; he was clearly not privy to the secret deliberations that a group was undertaking on behalf of our Prime Minister with the French government.

If the defence ministry was kept out of the defence deal and if the external affairs ministry was kept at a safe distance from the negotiations with the French government, then who firmed up the 36 outright Rafale purchase deal that the Prime Minister announced along with the French President on April 10, 2015?

That is a big mystery.

That mystery turns ominous when it is seen in the context of several developments before and after the declaration of the deal. The initial Rafale agreement executed by the Manmohan Singh government—where the defence minister AK Antony was the spearhead—had the provision for the Hindustan Aeronautics Limited (HAL), the decades-old public sector organisation dealing with defence production, to be the offset partner for the deal with the Dassault Aviation (DA), the French manufacturer of the Rafale aircraft.

As a matter of fact, the HAL and the DA signed a detailed work share agreement on March 13, 2014. That remained in place even after the change in government in May, 2014. In fact, the DA, in its website, periodically recorded the satisfactory progress made in its talks with HAL in this regard. That explains why even the foreign secretary spoke about the HAL's deep engagement with our defence ministry and the French concerns in the ongoing Rafale deliberations, just two days before the Prime Minister unravelled the new Rafale deal.

But clearly the Prime Minister's secret team had put together a different Rafale arrangement in which the public sector HAL would be given a short shrift and the leading industrialist Anil Ambani would be roped in. It may not be a matter of a coincidence that less than two weeks before the Prime Minister unveiled the new Rafale deal, Anil Ambani-led Reliance group registered a new company called Reliance Defence. (The Reliance Defence came into existence on March 28, 2015, and the PM announced the new Rafael deal on April 10, 2015).

And, lo and behold, a newly minted entity, with no background or experience in defence production, was anointed as the offset partner for the Rafale deal, replacing the decades-old behemoth HAL which has been manufacturing the combat aircraft Tejas. The interesting part of the story was that a company which had been incorporated with just ₹5 lakh share capital was handed down a project worth supposedly ₹30,000 crore to handle!

That was seen as a classic case of crony capitalism. What added zest to the cronyism story was the following: on June 24, 2016, the BJP government allowed 49% foreign direct investment in the defence sector. Barely three months later, on October 3, 2016, the Reliance Defence-Dassault Aviation joint defence production venture was announced.

It was seen as a full-blown case of stigmatised capitalism—to use the term the former chief economic adviser Arvind Subramanian has coined to describe such cases—on display.

What has further added gist to the stigma is the government's stubbornness to refuse to disclose the final price of the Rafale aircraft. It says that it would only reveal the base price but not the price with the add-ons as that would compromise national security.

It seems to be a desperate act of a cover-up. Several countries have purchased Rafael fighter jets from Dassault and they disclosed the final price they paid for it and that has not compromised their national security. The latest in the list is Qatar which has said, on record, that it purchased, in November 2017, 12 Rafael jets with a final price of US $108.33 million (₹695 crore) per aircraft.

Well, the Qatar government has just given the price; it has not disclosed the weapon system that comes with the package. So where is the threat to its national security?

If Qatar, a monarchy, can be so transparent, why can't India, the world's largest democracy, hide behind facile excuses?

Has it something to do with the fact that India has paid such an exorbitant amount of the taxpayer's money that the world would smell a scam in the deal? The Congress president Rahul Gandhi quoted a figure of ₹1,570 crore (US $242 million) that the Modi government has alleged to have paid for each aircraft.

If the Congress president was wrong, then the BJP government would have set the record straight, instead of facing embarrassment within the country and outside due to its silence. But the BJP perhaps reckons that it would face greater embarrassment if it reveals the price of the Rafael deal.

Clearly, a scam is brewing, a scam that is likely to tear apart the veneer of honesty that the BJP had flaunted before the people of the country in the last election.