Anurag Singh Thakur
Anurag Singh Thakur

On the last day of the monsoon session Minister of State for Finance Anurag Singh Thakur laid on the table not one or two but as many as 29 CAG reports that were on the backburner all this while.

The government had a good reason to do so: It could not have held back the reports any longer as there is a Constitutional obligation under Article 151 to table every CAG report in Parliament.
One such report makes interesting reading: It says that French aerospace major Dassault Aviation and European missile maker MBDA are yet to fulfil their offset obligation of offering high technology to India as part of the deal relating to procurement of 36 Rafale jets. The disclosure has come just as Rafale fighter jets are being inducted into the Indian Air Force. The Rafale deal is India’s biggest ever defence purchase and involves a clause which states that 50 per cent of the total amount of the deal is to be invested back in India in the form of offset obligations.

The CAG has also painted a grim picture of efficacy of India's offset policy saying it did not find a single case of foreign vendors transferring high technology to the Indian industry, adding that the defence sector ranked 62nd out of 63 sectors receiving FDI.

Under India's offset policy, foreign defence entities are mandated to spend at least 30 per cent of the total contract value in India through procurement of components or setting up of research and development facilities.

The auditor said though the vendors failed to keep up their offset commitments, there was no effective means of penalise them. The CAG said it undertook the performance audit of the offset policy after a decade of its roll out to assess the extent to which its objectives were met.

TANKER FLEET: Another CAG report reveals how undue favour was shown by the Indian Navy to a foreign vendor in the procurement of a fleet of tankers worth Rs 936 crore. The report says: Indian Navy awarded a contract for acquisition of a fleet tanker to a foreign shipyard, even though the steel to be used by the shipyard in construction did not meet Indian Navy’s technical specifications.

RADARS: In yet another instance, Bharat Electronics, a PSU, supplied completely knocked down imported radars instead of indigenously manufactured ones, with no benefit to the Indian Air Force.
HELICOPTER ENGINES: Likewise, despite knowing that two Kamov 25 helicopters with the Navy were old and in a poor material state with virtually no product support, Ministry of Defence concluded contracts with a foreign firm for their overhaul at a cost of Rs 10.38 crore. Not only was the quality of the overhaul poor but expenditure amounting to Rs 8.14 crore became unfruitful as flying operations on these two helicopters were discontinued due to severe defects in their engines. Related procurement of spare KA 25 engines also became wasteful as the engines could not be utilised.

ELECTRONIC WARFARE: Despite an on-going indigenous programme for development of Electronic Warfare systems, Indian Navy spent Rs 472 crore on import of seven Electronic Warfare systems, on the grounds of operational emergency. The timeline of nine weeks given by the Raksha Mantri was overshot considerably and it took 176 weeks to finalise this contract. The expenditure, thus, could not meet the urgent operational requirement.

AIR BASES NOT READY: The Ministry had sanctioned the establishment of an airbase at Phalodi in 1985 and an Air Force station in South India in 1984. Even after two decades both are yet to be commissioned.

SUBMARINES: Owing to poor planning, lack of need assessment and absence of a conclusive time bound agreement with US Navy, there was an inordinate delay in commissioning the Indian Navy submarine rescue facility. The expenditure of Rs 3.35 crore incurred could not serve its objective as by now 75 per cent submarines of Indian Navy have already completed three fourths of their estimated operational life.

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