CAG report on Rafale offset deals only after Lok Sabha elections?
NEW DELHI: A report by the government’s auditor, the Comptroller and Auditor General (CAG), into 11 defence deals including the one for the purchase of 36 Rafale fighter jets, was submitted to the President and the government on Monday, clearing the decks for its tabling in Parliament in the next two days, officials familiar with the development said on condition of anonymity.
Interestingly, HT has learnt that the report may have sidestepped the controversial offset aspect of the Rafale deal — the opposition alleges that the old deal was scrapped and a new one signed, so as to benefit Anil Ambani’s Reliance Defence though an offset deal (a charge denied by all stakeholders) — which will be part of a separate report that deals with offset deals across all three defence services.
“The draft report on the offset deals is ready and it has been sent to the ministry of defence for its comments, which are awaited. Once the comments are received, the final report will be prepared. The final audit report on offset deals may come after the elections,” a government official said on condition of anonymity.
According to officials cited in the first instance, the report has
been divided into two sections — one pertaining to 10 acquisitions and the second, exclusively on Rafalel.
The report, titled Capital Acquisitions of the Air Force, looks at major procurements over five years.
The second section is believed to focus also on the contentious pricing aspect of the Rafale aircraft deal.
“The report contains a comparative analysis of Rafale’s pricing vis-à-vis the initial plan to buy 126 jets, including 18 in flyaway condition. The NDA [National Democratic Alliance] government decided to buy only 36 Rafale jets, all in flyaway condition,” added the government official cited above.
The scrapping of the 126 aircraft deal, initiated during the previous United Progressive Alliance’s (UPA) regime, by the NDA has become controversial. The Opposition, led by the Congress, alleges that the new price is much higher than the old one, and that due process wasn’t followed (apart from the charge regarding offsets).
The government says it has managed to get the basic jet at a lower cost, and that all procedures were followed.
A CAG official explained that the comparative analysis has been done in percentage terms; the actual comparative price of the jet was mentioned in the report but was redacted, this person added on condition of anonymity.
“The redaction has been done on the request of the defence ministry which cited national security as well as the confidentiality clause of the deal with the French government. There have been many other CAG reports where sensitive information has been redacted earlier too,” added the CAG official.
A CAG spokesperson confirmed that the report has been sent to the government and the President.
The submission of the report comes a day after the Congress demanded that Comptroller and Auditor General Rajiv Mehrishi recuse himself from auditing the deal as he was the finance secretary when the deal was negotiated. The finance ministry, however, refuted the allegations and said Mehrishi never dealt with expenditure proposals from the defence ministry.
“To claim that secretary [economic affairs] as finance secretary would have dealt with the expenditure proposals from the ministry of defence is totally a figment of imagination and stretch of facts,” it said in a statement.
Union minister Arun Jaitley accused the Congress of casting aspersions on the institution based on a “falsehood”.
A second CAG official explained on condition of anonymity that Mehrishi was not the expenditure secretary at the time of the deal. All five departmental secretaries of the finance ministry report to the finance minister and one of them is designated as the finance secretary.
“Therefore, while being the finance secretary, Mehrishi didn’t deal with the Rafale matter,” this person added.
The Rafale issue was even raised before the Supreme Court, which did not find any substance in the allegations, although its ruling didn’t put an end to the controversy because of some factual errors in the judgment, which, the government claims, are on account of misinterpretation and, the Opposition claims, arise from the government misleading the court. The government has filed an application to correct these mistakes.