SC’s Rafale Verdict is Narrow, Govt Still Has A Lot to Answer For
The Supreme Court bench that has dismissed all the petitions relating to the Rafale deal, has taken a narrow and orthodox view of the issue.
The judgment read out by Chief Justice Ranjan Gogoi has said that the need for the aircraft and its quality are not in doubt. That is, indeed, true. The aircraft is first-rate, and, yes, the Indian Air Force needs them badly. Further, it has said that issues relating to business decisions such as pricing and choice of offset partner, are not within its purview. But that is precisely where the rub lies.
SC Hasn’t Looked Into How Govt Acquired Rafale
The allegation against the ruling party is that it bought the aircraft at a vastly inflated price, which was related to the issue of offsets being given to an inexperienced company.
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Essentially, the court seems to have argued that national security concerns override many of the concerns expressed by the petitioners, and in any case, the apex court cannot become an appellate court for defence deals.
They said they had no reason to doubt the decision-making process and nor was there any material to show that there was commercial favouritism in the deal, despite allegations that the Modi government had taken the offset contract from the Hindustan Aeronautics Ltd and given it to Anil Ambani’s Reliance Defence.
Questions Looming Over Rafale
Petitions had demanded a court-monitored investigation into the deal after former President Hollande told a French journal in September that the Indian government had proposed Ambani’s company as a partner for the deal. The Congress accused Prime Minister Modi and his government of corruption and crony capitalism, and demanded that the pricing details of the aircraft be made public. The government had rejected this citing ‘secrecy clauses’ in the deal.
First, how come a deal for 126 aircraft was suddenly reduced to 36? That the Indian Air Force needs more fighters is evident from the fact that earlier this year, the IAF put out a formal Request for Information (RFI) for 114 fighter aircraft, and, surprise, surprise, Dassault is among the six companies who have responded, offering its Rafale.
Why the Need for Offsets?
So we are in a bizzare situation where the government first accepted the need for 126 aircraft, chose the Rafale, then for reasons it has not disclosed, reduced the number to 36, and has now expressed a desire to acquire 114 more.
Considering that the Rafale won the last competition, we would assume that they would win it again and that we would end up paying more for what we could have acquired several years ago, or even a year ago. The Indian Air Force and the government would then have tied themselves into knots.
Second, of course, how and why Dassault chose as its partner a company (Reliance Defence) which has no experience in the aviation business.
Because it is a well-known practice that defence companies simply add the cost of offsets to their base price for a product. Indeed, if you do not ask for them, you can get that as a discount on the price. The theory behind offsets is that they will help create a defence manufacturing eco-system by compelling manufacturers to invest in making parts of the product in India.
Little Regard for Procedure & Processes
There is, of course, a possibility which we can only examine as a speculation since it is so sensitive that no information will be forthcoming. That is, that the government was in no position to acquire the entire lot of 126 Rafales and decided on 36 because it urgently needed to upgrade the aircraft that are designated for use by the Strategic Forces Command, who are tasked to deliver nuclear strikes.
These aircraft would have special bells and whistles which could include hardening their electronics for EMP, as well as equipment to penetrate enemy air space. So, National Security Adviser A K Doval, who is in-charge of the nuclear arsenal, persuaded the prime minister to acquire a limited number of the highly capable aircraft.
Why Reliance Defence? Speculation Continues
As for explaining the choice of Reliance Defence and Anil Ambani, that, too, will have to remain in the realm of speculation, because we have Hollande’s word against that of Dassault. And one of them is an interested party.
At this point the judicial system has said what it had to, but the political system, too will have to have its say because the politics of the time demands it.
(The writer is a Distinguished Fellow, Observer Research Foundation, New Delhi. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)
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