Rafale deal: Controversy strikes again
Current Affairs
On July 3, 2021, a French judge was appointed to lead a “highly sensitive” judicial investigation in the EUR 7.87 billion (INR 59,000 crore) Rafale deal with India for the sale of 36 fighter aircrafts.
Sherpa, the French anti-corruption NGO, has filed a complaint with the tribunal of Paris, citing corruption, influence peddling, money laundering, favouritism and undue tax waivers surrounding the deal.
This has led to reignited demands in India for an independent probe in the matter.
What is the Rafale deal?
Manufactured by French company Dassault Aviation, Rafale is a twin-engine medium multi-role combat aircraft. The Rafale jets are considered one of the most potent combat jets globally.
As per the Indian government's plan to revamp its IAF fleet by introducing Medium Multi-Role Combat Aircrafts (MMRCA), the process began in 2007 and in 2011, IAF conducted technical and flight evaluations and declared that Rafale and Eurofighter Typhoon had met its criteria.
Rafale was declared as the lowest bidder in 2012 and contract negotiations began with its manufacturer.
Original deal by UPA
The original contract discussed was for 126 aircrafts, 18 of which were to be bought off the shelf from Dassault and the remaining 108 to be manufactured under license by Hindustan Aeronautics Limited (HAL) with a transfer of technology from Dassault.
In February 2015, after BJP came to power in 2014, it was reported that the Rafale purchase deal was headed for cancellation as Dassault had been misjudged to be the lowest bidder due to deficiencies in the bid.
New deal announced by PM Modi
In April 2015, on an official visit to France, Narendra Modi announced that India would acquire 36 fully built Rafale aircrafts, instead of the original 126 aircrafts.
The new agreement included an offset clause which stated that of the total amount of the deal, France would invest 20% into local production of the Rafale components to further the Make-in-India initiative and 30% will go into various aeronautical and military research programmes in India.
On October 3, 2016, Reliance Group and Dassault Aviation announced the creation of a 51:49 joint venture named Dassault Reliance Aerospace Limited (DRAL).
Claims by opposition
The Congress has claimed massive irregularities, alleging that the government was procuring each aircraft at a cost of over INR 1,670 crore as against INR 526 crore finalised by the UPA government during negotiations for MMRCA.
Congress also questioned why HAL was not involved in the deal and alleged that the Anil Ambani-led Reliance Defence Limited had been unfairly chosen as the Indian partner under the offset clause as the private firm has no prior experience in aerospace manufacturing.
Role of Anil Ambani led Reliance
In September 2018, the former French president Francois Hollande revealed that he had no choice in selecting the Indian offset partner and that Reliance was named by the Indian side. Dassault however, said that Reliance was chosen by Dassault independently.
Mediapart, the French media outlet reporting the case, has alleged that Reliance was granted a financial gift by Dassault. Mediapart also claims to have papers that show that the partnership between the two groups was actually signed two weeks before the surprise announcement by PM Modi.
Government’s response
In the past, the government has refused to share the details, citing a secrecy clause of a 2008 pact between India and France*. It has maintained that the cost of 36 Rafale jets cannot be "directly compared" with the original proposal to buy 126 combat aircrafts as "deliverables" were significantly different.
In November 2018, the SC bench headed by CJI Ranjan Gogoi reserved verdict in the Rafale case after extensive arguments but later dismissed a petition seeking a probe into the alleged irregularities, in December 2018.
*SC asked the Centre to share Rafale pricing details in sealed cover, which the centre obliged to.
Investigation revisited
February 2019: a new report claimed that the defence ministry objected to PMO’s “parallel negotiations” with France in 2015.
May 2019: The SC reserves order on pleas against the SC’s 2018 verdict. The government files an affidavit seeking dismissal of the review.
November 2019: Petitions seeking a review of the 2018 decision are rejected.
July 2021: Demand for re-investigation of the deal in India grows after a probe was launched in France.
Cabinet reshuffle: What and why?
Politics X Opinion
The Modi government has reshuffled its cabinet for the first time since its re-election in 2019. Here's the full list of Ministers who took oath yesterday.
Among the big names to resign include Health Minister Harsh Vardhan, Education Minister Ramesh Pokhriyal Nishank, Labour Minister Santosh Gangwar, IT and Law Minister Ravi Shankar Prasad and Environment and Information Broadcasting Minister, Prakash Javadekar.
An ex-Congress face taking oath too?
J Scindia is also the first major Congress face to get rewarded in the Centre by BJP. Although it would be fair to note that this addition has come after Scindia singlehandedly brought the MP Government to the BJP.
Why is the reshuffle happening?
Likely reasons for dropping some ministers are performance and age.
BJP is saying that the idea behind the reshuffle is not just to address recent poll performances and concerns about the handling of the second wave of the pandemic, but also to have a “young” cabinet.
We, however, believe that there might be a third reason: elections.
Performance or age
Harsh Vardhan was greatly criticized For his inadequate handling of the Covid situation during the second wave. Gangwar similarly received flak for his handling of the migrant crisis last year.
Santosh Gangwar, 73, could have been dropped due to his age. Also, Pokhriyal has cited health reasons for his resignations from the cabinet as after suffering from Covid in April and being in and out of the hospital his health has been on a decline.
In West Bengal, after BJP’s defeat in the assembly elections earlier this year might have affected Supriyo and Chaudhuri’s place in the Cabinet. While technically the party improved its tally in the state, Supriyo did lose to Trinamool Congress candidate Aroop Biswas.
An election-focused reshuffle [Author’s opinion]
This is clearly a very election-focused reshuffle, with many leaders from Uttar Pradesh coming in, and allies like Apna Dal being given importance.
Babul Supriyo not being a part of the Cabinet anymore is another instance of it being an election-focused one, as the West Bengal Election is done. So, now Supriyo is clearly not going to reap any dividends for the party. They have also rewarded party hard-working Organisation Leaders like Bhupendra Yadav.
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