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Congress rejects Arun Jaitley’s accusations on Rafale deal, says FM not aware of defence procurement policy provisions

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New Delhi: The war of words between the Congress and the government over Rafale deal intensified today as the opposition party rejected Finance Minister Arun Jaitley‘s contention that the government had nothing to do with the selection of partners for offset supplies.

Senior Congress leader Anand Sharma said vendors have to disclose how the offset contracts would be discharged under the defence procurement policy. “For him (Jaitley) to say that offset is not part of the contract is wrong,” he said and demanded a probe alleging that Anil Ambani’s Reliance Group had prior information that PSU Hindustan Aeronautics Limited would not get the offset contract.

The Congress’ reaction came after Jaitley accused the opposition party and its leader Rahul Gandhi of “peddling untruth” on the deal and seriously compromising national security.


In a Facebook blog, Jaitley today refuted Congress’ allegation that the government had benefited Anil Ambani’s Reliance group, saying “Government of India has no contract whatsoever with any private industry in relation with the Rafale aircraft supplies”. He said any Original Equipment Manufacturer (OEM) under the offset policy of the UPA can select any number of Indian partners, both from the private sector and the public for offset supplies.

“This has nothing to do with the Government of India and, therefore, any private industry having benefitted from the Government of India is a complete lie,” he said.

Anil Ambani’s Reliance group, which has slapped “Cease and Desist” notices on many Congress leaders asking them not to make false and defamatory statements on the deal, had also earlier asserted that Dassault, the French firm that is to supply 36 Rafale fighter jets, choose Reliance Defence Ltd to meet its ‘offset’ or export obligation in the contract and the Defence Ministry has no role in the selection of Indian partners by foreign vendors.

The company has also rejected allegations that Reliance Defence was incorporated days before announcement of the Rafale deal, saying three companies were incorporated in December 2014 and Reliance Group’s entry into defence sector was announced at Aero India in February 2015.

But the Congress today rejected Jaitley’s assertions. Sharma said that under the defence procurement policy it is very clear that the vendor has to notify how the offset liability will be discharged.

“You left out HAL, violated the Official Secrets Act, did not seek the mandate of CCS and conducted no price determination for reducing the aircraft purchase from 126 to 36 aircraft. So there should be a probe into this. They may deny whatever, but the truth will come out,” the Congress leader told reporters.

He also said that the defence procurement policy makes it clear that the offset contract has to go to a defence PSU with experience in the sector.

“Only the prime minister knew that the offset contracts would not be given to HAL and he violated the oath of secrecy taken on the position he holds,” he said, adding, “the Official Secrets Act says such things are not to be disclosed. How did Anil Ambani know that HAL will not get the contract and he set up his company 10 days before?”

He said under the UPA, offset was 50 per cent of the contract and HAL did not get the contract or transfer of technology. “The finance minister has not talked about it.”

“When the prime minister went abroad, did he take the mandate of the Cabinet Committee on Security (CCS) regarding cancellation of the earlier contract,” he asked.

Countering Jaitley’s charge that national security was compromised by the Congress, Sharma said, “Does national security say that there should be corruption and a wrong decision.”

On Jaitley’s allegation that the UPA delayed the procurement procedure for over one decade “on account of the incompetence and indecisiveness of the UPA Government”, Sharma said negotiations were being held in a transparent manner through a global tender and it takes times as trials are held.

But the price is three times more under the new deal than the earlier price, he claimed and asked, “What is the government hiding here?” He said as per the defence procurement policy, it is written in the contract what percentage is offset contracts and Dassault will have to disclose as to how it intends to discharge the offset liability.

“Probably the finance minister does not know of this,” Sharma said.

Sharma said on October 27, 2017, French minister for armed forces had come to India and met Indian defence minister in the morning in Delhi and then went on in a chartered plane to Mehan in Nagpur in the afternoon, to attend the foundation laying function of Reliance Infrastructure where Union minister Nitin Gadkari was also present.

“Questions are raised as it involves contracts worth Rs 30,000 crore and to say the government has no information, is wrong. How did a private company know before the decision that the offset contracts would be taken away from public-sector Hindustan Aeronautics Limited (HAL),” he asked.

The Congress has continued its relentless assault on the government over the Rafale deal to corner it in the run-up to next general elections especially as Modi government has often cited a corruption-free administration as one its achievements after several alleged scams came to light during the Congress-led UPA rule.