CAG report on Rafale deal is a blessing for Modi government

French fighter jet Rafale made by Dassault performs during the Breitling Airshow in Sion, Switzerland September 15, 2017. REUTERS/Denis Balibouse/File Photo
  • New deal saved 2.86% for the Indian exchequer, says India's federal auditor.
  • Latest report tabled in the Parliament will help Modi in fighting corruption charges from the opposition.
  • Opposition had hoped to corner the Modi government over the controversial defence deal.

The Narendra Modi government struck a better deal than the Congress, that's the verdict from the Comptroller and Auditor General of India (CAG), the country's federal auditor, which tabled its report on the controversial 2015 deal to buy 36 Rafale jets from French company Dassault, according to news reports.

"Compared to the 126 aircraft deal, India managed to save 17.08% money for the India-specific enhancements in the 36 Rafale contract," news agency ANI said, adding that,"the delivery schedule of the first 18 Rafale aircraft is better than the one proposed in the 126 aircraft deal, by five months."

However, the full price of the jets have been redacted in the report based on the insistence of the Defence Ministry citing the Indo-French agreement of 2008 and the provisions of inter-government agreement, another news agency IANS reported.

In April 2015, Prime Minister Narendra Modi had announced that India will buy 36 French-manufactured Rafale fighter jets off-the-shelf. This was a departure from the original plan, under the previous regime, under which India would buy 18 off-the-shelf jets and another 108 would be assembled by the state-run Hindustan Aeronautics Limited or HAL in Bengaluru. Modi , however, intervened and decided to buy 36 "ready-to-fly" fighters instead of trying to acquire technology from Dassault and make it in India.

"A Defence Ministry team in March 2015 recommended the scrapping of the 126 Rafale deal saying that Dassault Aviation was not the lowest bidder and EADS (European Aeronautic Defence & Space Company) was not fully compliant with the tender requirements," the CAG report said according to ANI.

The opposition parties had cornered the incumbent Modi government alleging that the ₹590 billion deal was more expensive and it included kickbacks. It was also said that the deal was made to help Anil Ambani, whose Reliance Naval and Engineering was reportedly brought in to support Dassault. Both entities have denied this.

Modi also faced a direct charge after news reports revealed that the Prime Minister's Office had intervened in the deal negotiations and in fact, dismissed the apprehensions of its own Defence Ministry.

The latest report from CAG will be a big blessing for Prime Minister Narendra Modi who will be seeking re-election in the upcoming summer.

However, the opposition was already prepared. Prior to the release of the report, the Congress party had pre-emptively dismissed the findings of the report, explaining that Rajiv Mehrishi, the current Comptroller and Auditor General of India, took part in the deal’s negotiations.