WHAT THE CAG SAYS ON RAFALE

The CAG report looks at 11 purchases of the air force, including the Rafale deal. The bottomline of the report (that the deal struck by the NDA was cheaper than the UPA’s) should make the government happy. But there’s enough in it for the Opposition to keep up protests

Is the NDA government’s Rafale deal better than UPA’s in terms of price?

The two deals are largely the same, although the NDA’s is 2.86% cheaper than the UPA’s after taking into account factors such as the price escalation over the years. Some components, for instance the so-called India Specific Enhancements were less expensive in the new deal, but others, such as the Engineering Support cost, were higher. On the basic aircraft itself, CAG found no difference in price between the old deal and the new one

What about govt’s claims that the new deal gets the

basic jet 9% cheaper?

CAG doesn’t see it that way. It believes the government arrived at this price by comparing a fixed price (usually higher) with a non-fixed price

So, the government is vindicated?

Yes and no. There is enough substance in the report for both sides to spin. For instance, the UPA’s 2007 deal had Dassault Aviation providing performance and financial guarantees totalling 25% of the value embedded in it. The 2016 one did not. CAG says this resulted in a saving for Dassault that was not passed on to the government of India