CAG's Audit Report Reveals That 2016 NDA's Rafale Fighter Jet Deal Cheaper than UPA's Deal in 2007

CAG's Audit Report Reveals That 2016 NDA's Rafale Fighter Jet Deal Cheaper than UPA's Deal in 2007

While proving Narendra-Modi government's decision correct, Comptroller and Auditor General (CAG), country's top auditor which upholds the laws of the Parliament in order to safeguard the interests of the public exchequer, has claimed in its audit report that the Rafale fighter jet deal signed in the year 2016 was 2.86 per cent cheaper than the aligned price of the deal of UPA in 2007.

The report mentioned that three items, including basic aircraft, were obtained at the same price, whereas, four other items were purchased at lower than the aligned price.

In its 141-page report, CAG has mentioned that the flyaway price of the Rafael jet is the same as it was consented in 2007 by the UPA government.  However, the report does not disclose the actual price of the 36 Rafale fighter jets as it is contracted by the NDA government but it was added that India has figured out to save 17.08 per cent money for the India Specific Enhancements in the 36 Rafale contract.

The report, "Performance Audit on Capital Acquisition of the Indian Air Force" also clarifies that the delivery of the aircraft would be a month faster as compared to earlier deal.

The deal also pointed out about the Sovereign Guarantee, which is basically a promise by the Government to discharge the liability of a third person in case of his default. The Ministry of Defence had sought a sovereign guarantee from the French government, though, the French government only provided a 'Letter of Comfort'.

In the present case, the report says that if there will be a breach of an agreement, the Indian Ministry would first settle it by way of the arbitration directly with the French vendors. It was added that if arbitration award were in favour of Indian party and if the French party fails to honour the award, then the French government would make these payment of these award on behalf of the vendors but before that India has to exhaust all legal remedies available to it.

It was also mentioned that the French government did not agree to an escrow account stating that the Government of France has already provided guarantees which are far-reaching and unprecedented.

The report further says that the main reasons for delays in the acquisition process were repeated change in Air Staff Qualitative Requirements (ASQRs) during the procurement process which also led to difficulties during technical and price evaluation.

As per the facts, CAG's audit report regarding Capital Acquisitions in Indian Air Force was placed in Rajya Sabha that also included the details of the Rafale deal signed between India and France.

The report was much expected to answer several queries about the government’s rather confusing positions on the case.

Nonetheless, a point to be noted here is that if CAG has given its audit report now then it raises questions about the Supreme Court ruling which relied on CAG report on Rafale & its examination by Public Accounts Committee, and dismissed several petitions demanding for an inquiry into Prime Minister Narendra Modi’s decision making around the Rafale deal.

Comptroller and Auditor General of India (CAG)
Narendra Modi
Rafael deal
UPA Government

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