Public perceptions over Rafale

Much has been written and spoken about the Rafale deal and more will be done in this election season. Not being a defence expert and lacking expertise on the pricing of arms and aircraft has not prevented people from commenting on the contentious issue. It is interesting to note how the Rafale deal and the issues surrounding it will impact public perceptions at large during this election season.

The Indian Air Force has been seeking a new twin-engine fighter jet for some time in order to replace the ageing Russian fighter jets that are being phased out. After testing out a number of global options, the Air Force in 2012 put the Rafale, built by France's Dassault, and the Eurofighter Typhoon on its final list. The Congress-led United Progressive Alliance government had put out a tender for 126 fighter jets and, because of a lower bid offer, had planned to buy 18 Rafales in fly-away condition from Dassault, with the remaining to be built in India along with the state-owned Hindustan Aeronautics Limited. In 2015, however, on a visit to France, Modi announced a completely new deal, in which India would be getting 36 Rafale jets from France, all in fly-away condition. Under the terms of the 59,000 crore deal, all planes would be built in France but Dassault would have to offset about 50 per cent of that cost in India.

Number of aircrafts

UPA deal (not signed ever) was for 126 aircraft and that of the NDA is for 36 aircraft. Modi government has been vociferous over the air security in India and the need of these high-end aircraft. If so, why is the number radically diminished and how does it ensure air security for a vast nation like India, the seventh largest by area and second largest by population in the world? This is the one common question in the public mind.

Pricing

The UPA claim is that its negotiated price was 526 crores per aircraft. Though there are mentions of this in some official documents, a deal was never signed on this, however. On the other hand, the final Rafael deal by Modi government puts it to 1690 crores per aircraft, more than 300 per cent of the UPA pricing in 2012. Now, while Congress is claiming it to be a daylight robbery, BJP argues that Congress negotiated for an engineless basic aircraft chassis, and with advanced radar and many more features, the price is thrice today. It is tough to convince the public for a three-fold hike in the six-year gap, especially when both the aircraft are MMRCA ones or multimode Rafale combat aircraft, and 18 of the 126 in UPA deal were pegged to be in fly-away condition. Such an aircraft cannot be engineless when negotiated to buy.

Choice of the Indian partner

UPA had chosen Hindustan Aeronautics Limited (HAL) – a public sector undertaking – to be the offset partner of Dassault for Rafale. Out of the 126 Rafale jets, 18 were to be in a fly-away condition and 108 to be jointly manufactured by HAL and Dassault. In the new deal though, Dassault chose Reliance Defence of Anil Ambani to be the offset partner for 36 jets, and Dassault was mandated to make compensatory investments in India worth 50 per cent of the total cost of the deal which is 59,000 crores. Former President of France, Francois Hollande, who signed the inter-governmental agreement on Rafale in September 2016, told to AFP and published in Le Monde that the government of India had given no choice other than Reliance Defence to be the partner.

Neither Reliance Defence nor any of its allied companies have any experience of manufacturing aerospace and defence equipment. Anil Ambani's Reliance Group incorporated a defence company just days before Modi announced the new Rafale deal, a coincidence that has caused some eyebrows to be raised. Ambani also accompanied Modi to France on the same visit that led to the announcement of the deal. Crony capitalism hence is a natural criticism here.

At the time of the Dassault deal with Ambani, Reliance Defence, which had only been around for one year, already had a debt of 8,000 crore and losses of 1,300 crores.

However, both the present President of France and the Dassault CEO have noted that there were no pressures on them. This can be used as a counter but a weak one when the former President's interview is up there in Le Monde, the leading French daily.

Was PMO monitoring or interfering in the deal?

Putting forth a note of November 20, 2015, of the then Defence Secretary G Mohan Kumar, The Hindu newspaper and veteran editor N Ram claimed that PMO was running parallel negotiations with the French side even when Ministry of Defence (MoD) was in advanced stage of negotiations. On the other hand, the government submitted to the Supreme Court in October 2018 that only Deputy Chief of Air Staff was leading the 7-member MoD team in the negotiations. After this expose, while Congress claims it was an interference by the PMO to hike up the price and get Reliance in, BJP claims it was routine monitoring by the executive – PMO. Since the prices have actually tripled, the monitoring will sound very expensive in the public mind.

Goof-up on CAG report before PAC

Deliberating on four petitions over the same issue, the Supreme Court in December 2018 gave a verdict that all were in place and there was no need for a new investigation on the Rafale issue based on a sealed cover submitted by the government. But, facing a fierce Opposition's attack that it misled the Supreme Court by stating that the pricing of Rafale deal has already been examined by the Comptroller and Auditor General (CAG) and the Public Accounts Committee (PAC), the government later moved an application in the apex court seeking a correction in the order. This episode has also led to doubts as to whether the government had misled the Supreme Court.

While no aircraft is delivered yet, and no status on their actual manufacturing and advances from the Indian government are yet known, the issue is ripe in public mind and media. The twin aspects of the number of aircraft and increased prices, the damaging interviews of the former French President, the error before Supreme Court and parallel negotiations by the PMO, etc., are bound to be major talking points in this election season and will shape public opinion on this issue. Allegations of corruption do stick as we saw in the case of national money loss in the often-mentioned 2G-3G scam of the UPA government.

(The author is a media academic and columnist. Views expressed are strictly personal)