"Rafale Scandal Bigger Than Bofors", Says Arun Shourie. Reliance Responds

In a stinging indictment of the government, two former ministers Arun Shourie and Yashwant Sinha on Wednesday hit out at the Rs. 58,000 crore deal with France for 36 Rafale fighter jets signed in 2016, calling the deal "a textbook case of criminal misconduct" and demanding a forensic audit of the entire deal by the government's top auditor. Along with lawyer and Swaraj Abhiyan leader Prashant Bhushan, the three said Rafale is "not an ordinary scandal" and was bigger than any that India has seen.

"I can tell you as a person who handled the matter in regard to Bofors... that Bofors was absolutely nothing compared to this," Arun Shourie said, referring to the 1986 Bofors Howitzer gun deal that exploded in the Congress's face and cost then Prime Minister Rajiv Gandhi a chance to return to power in the next 1989 general election. Mr Shourie was a journalist before he joined the BJP and is seen to have led the reportage on the Bofors case.

The attack on the Rafale deal comes after a series of statements made by Congress president Rahul Gandhi who has said that the government is trying to block attempts in the media to independently report what the Congress calls a scam.

Mr Gandhi scaled up the attack on Defence Minister Nirmala Sitharaman in parliament last month, accusing her of lying to the country when she contended a secrecy pact didn't allow the government to put out details of the deal. The charge was forcefully rebutted by the minister, who called it "absolutely wrong". "It was agreement of secrecy," she said in her strident rebuttal that also quoted the French President Emmanuel Macron's interviews to two media organisations.

Prashant Bhushan said the government was hiding behind the secrecy clause because "they know as soon as they put the papers on the table, the game will be up".

Another key allegation that was reiterated at Wednesday's briefing was that there was a crony capitalist arrangement that ensured that Anil Ambani's Rafale Defence was awarded the offset contract for the deal. According to this, Dassault Aviation, the manufacturer of the fighter jets, would need to manufacture aerospace components worth Rs 30,000 crores in India.

It is this involvement of the private company that is at the heart of the opposition allegation that the fighter jets bought by Prime Minister Narendra Modi's government were overpriced. The government has repeatedly said it was not the centre's decision to select one company over another and Dassault was free to pick anyone.

Rajesh Dhingra, chief executive officer of Reliance Defence and Aerospace, called the effort to link Dassault's decision to select his company over the public sector Hindustan Aeronautics Ltd "a deliberate attempt to mislead".

"The defence ministry has no role in selection of Indian partners by foreign vendors. This has been position right from 2005 when offsets were first introduced. In more than 50 offset contracts signed till date, the same process has been followed. Therefore, it is a deliberate attempt to mislead," Mr Dhingra said.

Despite the allegations and several counter-arguments, the opposition, particularly the Congress, is determined to not back down ahead of next year's general elections and intends to turn it into a key election agenda.

To the oft-repeated opposition charge questioning why the Reliance group's company had been selected to make fighter jets in India though it did not have experience to make fighter aircraft, Mr Dhingra said no fighter aircraft were to be made in India under the existing contract since all the aircraft are to be delivered in 'fly away" condition in France.

But he also questioned the logic that only Hindustan Aeronautics had the experience to make the fighter jets in India. "If we were to follow the above logic, would that mean that we will never create any new capability beyond what exists and will continue to import more than 70% of our Defence hardware," he said.

He also dismissed the basic premise that Dassault had given Rs 30,000 crore worth of offset contract to Reliance as "totally unfounded". Dassault and its main suppliers have already indicated that more than 100 Indian companies would participate in the offset contracts including joint ventures with public sector firms such as HAL and BEL.

Dassault's share of offsets is approximately 25 per cent with remaining offset obligations being shared by others.