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Modi’s Rafale Deal

Modi’s Rafale Deal

Not even his grandfather had received the popular mandate that Rajiv Gandhi had received in the 1984 general elections when the BJP was reduced to a two-member party in Parliament. A person with no administrative experience, save piloting smaller aircraft of the now-extinct Indian Airlines, he rode to power on the strength of the sympathy wave generated by the assassination of his mother and prime minister Indira Gandhi by two of her own security guards.

Over a quarter century after his own assassination by the Tamil Tigers of Sri Lanka, there is agreement that it was during his tenure that the Telecom and Computer revolutions, like the White and Green revolutions of the past, got a push. If today telecom services are one of the cheapest in India and Indian telecom companies like Airtel are major international players and India is considered an Information Technology giant, it is because of his vision.

Yet, Gandhi lost the election in 1989 at the hands of his former finance minister VP Singh, who raised a banner of revolt on the plea that the 1986 deal in which India bought Bofors guns worth Rs 1,437 crore was shady. This was based on a report that the Swedish arms manufacturer had paid commission to procure the contract from India.

I was in Patna when Singh, who became Prime Minister, announced at a public rally that if he came to power he would disclose the details of the bribe receivers within a month. Twenty nine years after his promise, nobody knows for sure who received the money and how much.

What is known is that the Delhi High Court had posthumously exonerated Rajiv Gandhi of the charge of being a beneficiary of the kickbacks received from the Swedish firm and the country had spent multiples of the total bribe money of Rs 64 crore in its failed bid to arrest Italian businessman Ottavio Quattrocchi (1938-2013). However, the scandal was good enough to destabilize the Rajiv Gandhi regime that paved the way for the emergence of the BJP as its greatest beneficiary. AB Vajpayee would not have come to power but for Bofors.

It is a different matter that the Bofors gun proved its mettle when the Vajpayee government succeeded in liberating Kargil heights the Pakistanis had captured primarily because of its own inability to notice in time the Pakistani regulars capturing an area larger than the Delhi state.

Narendra Modi, too, was helped in no small measure by the campaign that the UPA government was corrupt. There were officials like Vinod Rai to give bogus theories that there was wholesale corruption in the allotment of spectrum to telecom companies when A Raja of the DMK was the minister concerned. Rai gave imaginary figures of the “presumptive” loss the government suffered.

Had he discussed presumptive loss while he was a school student, his teacher would have given him a rap on the knuckles. Instead, he was praised as a genius who could calculate presumptive loss, like the loss I suffered because I did not become a Comptroller and Auditor General and did not benefit from the recognition given by the BJP.

He was also helped by the likes of Baba Ramdev, who is today a multi-billion businessman, and the so-called Gandhian who sat on fast demanding a Lok Pal law. It is more than four years since the Act is in place but Modi has not shown any inclination to implement it on one pretext or another. Yet, neither Ramdev nor Anna Hazare reminds the prime minister about his own promise to rid the nation of corruption. Another key person who helped Modi was Gujarati businessman Adani, who lent him a chopper to take him wherever he wanted to go.

In 2014, money flowed into his coffers like water would jet out from the Narmada dam when its shutters are opened. Today, in less than four years of coming to power, Modi’s party built a party office which has no equivalent in any democratic country, including the world’s richest USA. It has state-of-the-art facilities and looks better than a corporate headquarters. Where did the money come from? I never gave any money. Did you, my dear reader, or anyone you know give money to the party to build its office?

The ruling party is flush with money. During the last Assembly election in Kerala, it was the BJP, which could win only one seat, which spent the maximum money. In terms of money, nobody can rival Modi or his party. If money can win an election, he has already won the 2019 election. He came to power in 2014 promising every Indian a minimum of Rs 15 lakh once he brings all the money stashed away in Swiss and other foreign banks.

Modi could not bring even Rs 15 per person from the foreign banks. How is the party so flush with money? On his many visits to foreign countries, he never took any journalist, save those from the Sarkari set-ups like AIR and Doordarshan, but he took with him businessmen like Adani and Ambani. They are the real beneficiaries of this regime. In saying so, I have not included party chief Amit Shah’s son, who had a tiny-tiny business which recorded the fastest rate of growth in the world of business since Modi came to power at the Centre.

One of the laws of Newton is that “every action has an equal and opposite reaction”. I remember seeing posters and cartoons depicting Rajiv Gandhi as the one who received the Rs 64-crore bribe from Bofors. Yesterday, I saw a poster asking Modi how the price of the Rafale fighter aircraft went up so drastically. Modi has a weakness for his friends, who are few in the party but so many in corporate houses. It is this weakness that has nearly felled Modi and landed him in neck-deep water.

What is Rafale? It is a French twin-engine, multi-role fighter jet designed and built by Dassault Aviation. Few doubt its combat capability. After a protracted negotiation, the UPA government decided to buy 18 Rafale aircraft, built in France. Another 108 were to be manufactured jointly by India’s Hindustan Aeronautics Limited (HAL) and Dassault Aviation. The per aircraft cost was pegged at Rs 526 crore.

The UPA government, especially Defence Minister AK Antony, could not push the agreement to fruition. In April 2015, Modi visited France, had discussions with French President Francois Hollande and concluded an inter-governmental agreement to supply 36 Rafale aircraft. Later in September 2016, India and France signed a Euro 7.87 billion (Rs 59,000 crore approximately) deal for 36 Rafale aircraft. The delivery will start in September 2019.

In doing so, he conducted himself like Putin of Russia, not even the President of the US. By the way, some in the BJP had all along been proponents of the Presidential system with lesser checks than in the US and France.

I have seen a video clip of a Press conference addressed by the then Foreign Secretary S. Jaishankar, wherein he clarifies that during a prime ministerial visit, policies, not the nitty-gritty of a project, are discussed. This means that he had no clue about what Modi had up his sleeves when he traveled to Paris. Now, why is the deal controversial?

The Congress has alleged that the per aircraft cost has gone up from Rs 526 crore to Rs 1,670 crore. If this is true, the Bofors bribe of Rs 64 crore is peanuts. The party has also alleged that a year after the Rafale deal was signed and put on the fast track for implementation, Qatar purchased 12 Rafale fighter jets @$108.33 million (Rs 694.80 crore) a piece.

What is most significant in the deal the UPA government had sewed up was the presence of the HAL as an important partner. True, the HAL’s track record as an aircraft manufacturer is pathetic. Yet, it is, perhaps, the only agency in India with some relevant experience to partner with the French company. Who knows it could have gained from the deal and emerged as a major aircraft manufacturer, like the Indian Space Research Organisation which benefited from its ties with the space organization in the erstwhile Soviet Union.

At his Press conference Jaishankar also mentioned HAL as a key player in the deal. Alas, in the deal finally signed by Modi and Hollande, HAL was nowhere. Its place was taken up by a new company called Reliance Defence. As the story goes, the company was floated less than two weeks before the deal for 36 Rafale aircraft was entered into. It is risky to mention who owns the new company, for he has a deep pocket to file a defamation suit and demand hundreds of crores of rupees.

What can be safely said is that it is owned by someone whose telecom company disappeared like Dodo in Mauritius when his own brother started a telecom company. His Airport Metro venture was equally disastrous. If HAL, founded as Hindustan Aircraft, seven years before Independence, does not have the competence to partner with the French company, how can the 12-day-old company trusted to undertake manufacturing work worth thousands of crores of rupees?

It was like the Modi government declaring an educational institution, to be set up by Mukesh Ambani, as a centre of excellence. Countless are the jokes invented by the people about an invisible institution where not even a single student has been enrolled or a teacher appointed becoming the joint Harvard and Cambridge of India.

Now the secret is out. The French have themselves admitted that it was at the instance of the Modi government that Reliance Defence was brought into the deal. What it means is that Modi used his position to help a businessman who would have otherwise gone bankrupt. He does not appear to have taken even his own Cabinet colleagues into confidence when he negotiated with his French counterpart.

Now reports have come that some officials also protested against the higher payment that has to be made to the French company, under the re-negotiated deal. The defence ministry now claims that a three percent per year increase in price is nothing unusual.

What is asked is why the price is three times, not three percent more. One can also understand the fall in the value of the rupee vis-a-vis the dollar and the Euro, though Modi had promised to their values on par with one another. Even so, the higher price is unjustified.

That the Rafale deal had everything against his “Make in India” programme would not have gone unnoticed by the people.

It is a truism that the weaker the case, the stronger should be the lawyer. The best man to defend the Rafale deal is Modi himself. He knows better than anyone. Maybe because he knows that his case is weak, he has been using lawyer Arun Jaitley to defend him. What the people want to know is the truth.

Maybe, some capabilities of the aircraft have to be kept secret, though the aircraft has been around for so long as to let every aviation expert know about its strengths and weaknesses. There is nothing secret about the cost the nation has to incur. Transparency is the key to good governance that Modi had promised in 2014.

Ideally, the Prime Minister should address a Press conference and let journalists ask him questions about the deal, why he chose Reliance Defence as a partner, when it does not have any aviation experience, except as an owner of some aircraft and what commission, if any, he or his party received. Otherwise, he should subject the deal to a review by a joint committee of Parliament, headed by an Opposition leader.

Modi also needs to answer questions as to how Reliance knew that if it formed a new company in the defence sector, it would be considered as a partner in the Rafale project worth Rs 56,000 crore. Otherwise, the Modi government will be remembered as a government of businessmen, by businessmen and for businessmen!

( ajphilip@gmail.com )

(Published on 01st October 2018, Volume XXX, Issue 40)