New Delhi: The Rafale fighter jet deal involved “major and unprecedented” concessions from the Indian government to the French. These concessions included waiver of anti-corruption penalties, a report in The Hindu said on Monday. Also, the Centre overruled financial advisers’ recommendation for making payments through an escrow account. All this happened just days before PM Modi signed the inter-governmental agreement with France to acquire 36 Rafale jets.
The report has the potential to undermine the anti-corruption campaign of the Narendra Modi government — one of BJP’s main election planks. The revelation comes just days after another Hindu report stated that ministry of defence officials had objected to the Prime Minister’s Office holding parallel negotiations with the French government as it “undermined” the position of the Indian negotiating team.
The report further states that three members of the negotiating team – M.P. Singh, Adviser (Cost), A.R. Sule, Financial Manager (Air), and Rajeev Verma, Joint Secretary and Acquisitions Manager (Air) – had strongly objected to dropping the anti-corruption penalty clauses, but were overruled. Their dissent note said that the deal involved direct dealing with commercial suppliers – Dassault and MBDA France – under cover of an inter-governmental agreement and dropping the clauses was not prudent, The Hindu has reported.
This assumes particular importance as the government also chose to do away with a sovereign or bank guarantee from France and settled for a letter of comfort, which is not legally binding, from the French Prime Minister.An escrow account would have been an important financial safeguard as it would have allowed the Indian government to release money to the French government, which would then make timely payments to the two private firms.