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Rafale deal: CAG report along expected lines on price, but raises other questions

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Rafale deal

[vc_row][vc_column][vc_column_text]The report of the Comptroller and Auditor General (CAG) on Rafale deal tabled on the last day of the Budget Session in the Parliament today (Wednesday Feb 13), while contradicting Modi government’s claim of the reworked contract price being 9% lower than the previous deal negotiated by the UPA government, said it was 2.8% cheaper.

The audit does not go into the unanswered question of what was the need for cancelling the old deal envisaging transfer of technology and working out a new deal. If the UPA government had been slow in finalising the deal, as Modi government alleges, it could have speeded up the negotiations and sealed it in a matter of months instead of taking another over year-and-a-half after Prime Minister Narendra Modi’s surprise announcement in Paris.

There is also a question about the claim of faster delivery of the fighter aircraft in the renegotiated deal. A report in The Times of India (TOI) said the CAG report says that in the 2007 offer, 18 aircraft were to be delivered by 50th month of signing the contract. The next 18 were to be licensed produced in HAL and to be delivered from 49 to 72 months of the contract signing.

However, in the 2016 contract, the first 18 aircraft would be delivered between 36 to 53 months after signing of IGA and the remaining 18 to be delivered by 67 months, the CAG says, according to the TOI report.

The first Rafale jet is reportedly expected to arrive only later this year – by September 2019 and the rest of the first batch by 2022. If the negotiation of the previous deal, that was nearly complete, had been expedited and completed in 2015 – when the fresh process was started – the first  batch of 18 Rafale aircraft would have arrived by next year.

Even without these, the report, “Capital Acquisition in Indian Air Force”, tabled in the Rajya Sabha by Union Minister of State for finance, Pon Radhakrishnan, is a mixed bag from which both the Modi government as well as the Opposition, particularly the Congress party, can choose points to suit their respective narratives on the Rafale deal.

The CAG report, while predictably redacting the controversial details of the final purchase price for the 36 Rafale fighter jets that the Modi government negotiated with the French government and Dassault Aviation in 2016, says that the government did save on the renegotiated deal: it was 2.8% cheaper than the 2007 deal.

It is pertinent to note here that the 2007 negotiations were being carried out for purchase of 126 Rafale jets, also involving transfer of technology to India’s Hindustan Aeronautics Limited (HAL). The deal negotiated by the Modi government in 2016 was for only 36 jets with no transfer of technology involved.

The CAG report also says that officials of the Indian Air Force had, indeed, objected to certain proposed enhancements to the jet, that were sought by the Indian government 2016 from Dassault Aviation, as unnecessary. This was from those who have to fly the fighter and go to battle.

The report states that at least four “unnecessary India specific enhancements” were made to the Rafale jet as part of the deal though senior officials from the Indian Air Force had categorically informed the Ministry of Defence (MoD) that these were not needed. The MoD ministry, the report states, overruled the view of experts from the Indian Air Force.

Aspects of the deal that are more expensive include engineering support package and performance-based logistics.

The Modi government can take heart from the report also saying that India managed to save 17.08 percent money for the India Specific Enhancements in the 36 Rafale aircraft contract as compared to the 126 aircraft deal proposed by the UPA regime. The cost of the basic aircraft is the same in both cases.

The contract for Rafale consisted of six different packages with a total of 14 items. The contracted price of seven items was higher than the aligned price, the price at which the contract should have been signed.

Three items, including basic aircraft, were procured at the same price. Four items were purchased at lower than the aligned price.

The auditor also endorses claims made in a recent report published by The Hindu newspaper earlier this week which the Opposition has since used to slam the Modi government for a “sell out” to Dassault Aviation. The report in The Hindu had said that the deal renegotiated by the Modi regime had excluded sovereign guarantee clauses for Dassault Aviation, thereby ensuring that the French defence giant gets undue benefits in exchange.

CAG said in the previous offer of 2007, Dassault Aviation had provided performance and financial guarantees which was about 25 per cent of the total value of the contract. The vendor had embedded the cost in its bid price. But in the 2016 contract there are no such guarantees or warranty. This led to saving for Dassault Aviation which was not passed on to India.

The CAG, however, does not factor this aspect in its estimate that says the NDA-II’s deal was 2.86% cheaper. If these costs were considered – 25 per cent of the total value of the contract – the Modi government’s deal would be more expensive than the UPA’s.

Further, the auditor suggests that a Defence Ministry team in March 2015 had recommended scrapping of the 126 jet deal saying that Dassault Aviation was not the lowest bidder and EADS (European Aeronautic Defence & Space Company) was not fully compliant with the tender requirements. This has been among the major claims of the Opposition while attacking the Modi government on the Rafale deal.

The report has examined 11 defence deals (five from the UPA era and six from the NDA era) which were signed between 2012 and 2017. Prices have been redacted only for the part of the report that deals with the Rafale purchase agreements.

The Congress and other opposition parties have dismissed the report as biased because auditor Rajiv Mehrishi was Finance Secretary when the deal for 36 Rafale fighter jets was inked in 2016. The Congress alleges that Mehrishi was “complicit in the irregularities” in the Rafale deal and alleged that “the bungling was happening at the highest level with his direct or indirect complicity and consent”.

Union minister Arun Jaitley lashed out at the Opposition: “The lies of the Mahajhootbandhan stand exposed by the CAG report. It cannot be that the Supreme Court is wrong, the CAG is wrong and only the dynast is right,” he said, taking a swipe at Congress president Rahul Gandhi.

The CAG report came even as a report in The Hindu newspaper on Wednesday said at least three senior Defence Ministry officials among the seven-member Indian Negotiating Team were of the view that the final price offered by the French Government cannot be considered as ‘better terms’ compared to the deal under the UPA.[/vc_column_text][/vc_column][/vc_row]

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Manipur Assembly to meet at 4 pm today, floor test likely under new chief minister

The Manipur Legislative Assembly will convene at 4 pm today, with a floor test likely as the new chief minister seeks to prove his majority in the House.

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Manipur assembly

The Manipur Legislative Assembly will convene at 4 pm on Thursday in Imphal, a day after Yumnam Khemchand Singh was sworn in as the chief minister. A floor test is likely to be held on the first day of the session to establish the majority of the newly formed government.

In the 60-member Assembly, the BJP holds 37 seats, while its ally National People’s Party has six members, giving the ruling combine a clear majority in the House.

Singh chaired the first Cabinet meeting of his government late Wednesday evening, shortly after taking oath as the 13th chief minister of Manipur. The meeting marked the formal start of administrative functioning under the new Council of Ministers.

His appointment came nearly a year after the resignation of former chief minister N Biren Singh, who stepped down following months of ethnic violence between the Meitei and Kuki communities in the state.

After taking oath, Singh thanked Prime Minister Narendra Modi and said he would work with “utmost diligence to advance development and prosperity in Manipur,” aligning the state’s efforts with the vision of Viksit Bharat.

He said the government’s focus would be on inclusive economic growth while preserving Manipur’s cultural heritage, adding that he would discharge his responsibilities with sincerity and dedication, mindful of the trust placed in him.

The summoning of the 12th Manipur Legislative Assembly by Governor Ajay Kumar Bhalla, along with the first Cabinet meeting, signals the resumption of legislative and administrative processes in the state, officially bringing President’s rule to an end.

The sixth session of the 12th Manipur Legislative Assembly was last held from July 31 to August 12, 2024.

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PM Modi skips Lok Sabha reply as protests force repeated adjournments

PM Modi did not deliver his Lok Sabha reply today after sustained Opposition protests led to repeated adjournments over a dispute involving Rahul Gandhi’s proposed speech.

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PM Modi

Prime Minister Narendra Modi did not deliver his scheduled reply to the Motion of Thanks on the President’s address in the Lok Sabha today after sustained Opposition protests led to multiple adjournments of the House.

The disruption followed an escalation of tensions linked to Congress leader Rahul Gandhi’s proposed speech and the suspension of eight Opposition MPs a day earlier. The situation worsened after remarks made by BJP MP Nishikant Dubey during the proceedings.

Dispute over references to books sparks fresh ruckus

The controversy intensified when Nishikant Dubey responded to Rahul Gandhi’s demand to speak on national security and references to the unpublished memoirs of former Army chief General MM Naravane. Dubey said that while Gandhi wanted to quote from an unpublished book, he himself had brought several books that, according to him, made claims about the Gandhi family.

As Dubey began listing these books and their contents, strong protests erupted from Opposition members. Krishna Prasad Tenneti, who was presiding over the House at the time, cited Rule 349, which restricts members from reading out books, newspapers, or letters unless directly related to parliamentary business. Despite repeated warnings, the matter remained unresolved, leading to another adjournment.

Rahul Gandhi accuses government of silencing debate

Earlier in the day, Rahul Gandhi alleged that he was being prevented from speaking on an issue of national importance. He claimed the government was uncomfortable with references to General Naravane’s memoirs, which he said discussed the handling of the 2020 China border crisis.

In a social media post, Gandhi said he intended to present the Prime Minister with a book authored by the former Army chief, adding that some cabinet ministers had even questioned the existence of the book. He also wrote to Lok Sabha Speaker Om Birla after the suspension of eight Opposition MPs, alleging that parliamentary debate was being curtailed.

After it became clear that the Prime Minister would not speak in the House today, Gandhi posted that PM Modi had avoided Parliament because he was “scared” to face the truth. Congress MP Priyanka Gandhi Vadra echoed the allegation, claiming the Prime Minister was unwilling to enter the House.

Proceedings disrupted throughout the day

Lok Sabha proceedings were first adjourned until 2 pm amid loud protests over the issue linked to Naravane’s memoirs. Even after the House reconvened, disruptions continued, preventing normal business from resuming.

Later, Congress MPs staged a demonstration outside the Parliament complex, demanding that Rahul Gandhi be allowed to speak on the President’s address.

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President’s Rule revoked in Manipur as NDA set to form new government

President’s Rule has been withdrawn in Manipur nearly a year after its imposition, paving the way for a new NDA-led government under Yumnam Khemchand Singh.

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President rule invoked in Manipur

President’s Rule has been revoked in Manipur nearly a year after it was imposed, clearing the way for the formation of a new government led by the BJP-led National Democratic Alliance (NDA). The decision came hours before the scheduled oath ceremony of the new council of ministers.

Chief minister-designate Yumnam Khemchand Singh is set to take oath later this evening, along with other NDA legislators who will formally join the new government. The revocation brings an end to central rule that had been in place since February 2025, following the resignation of then chief minister N Biren Singh.

Assembly status during central rule

During the period of President’s Rule, the Manipur Legislative Assembly remained in suspended animation, meaning it was neither functioning nor dissolved. With the restoration of the elected government, legislative activity is expected to resume.

Khemchand Singh, 61, belongs to the Meitei community. Two deputy chief ministers have been named to reflect Manipur’s ethnic diversity. Nemcha Kipgen, from the Kuki community, and Losii Dikho, from the Naga community, are set to take charge as deputy chief ministers.

According to people with direct knowledge of the matter, Nemcha Kipgen is likely to take oath from a Manipur government guesthouse in Delhi.

Key portfolios and leadership choices

Seven-time MLA from Bishnupur district, Govindas Konthoujam, said he has been entrusted with the Home portfolio. Emphasising stability and law and order, he said he remains committed to serving the state with discipline and restraint.

Sources said Khemchand Singh is viewed within the party as a non-polarising leader who is acceptable across internal factions at a time of political transition. While he is yet to be tested in governance, he is seen as a steady administrative choice capable of providing organisational discipline and continuity amid uncertainty.

Uneasy peace continues in Manipur

The formation of the new government comes against the backdrop of continued tension in Manipur, nearly three years after violence erupted between the Meitei community in the valley areas and the Kuki tribes in several hill districts.

A section of Kuki groups has been demanding a separate administrative arrangement, with negotiations involving multiple insurgent groups operating under two umbrella organisations that are signatories to the suspension of operations agreement.

In recent weeks, some Kuki civil society organisations have stated they would not participate in the Manipur government and have distanced themselves from Kuki MLAs expected to join the new administration.

A day before the announcement of the new government, Kuki leader Paolienlal Haokip posted on X that representatives of the Kuki Zo people could not take part in leadership selection without justice and a written commitment for political settlement.

Diverging demands from communities

Meitei civil society groups have maintained that all internally displaced persons should be allowed to return home safely, even as dialogue continues. However, Kuki leaders have insisted that a political solution in the form of a separate administration must come first, before discussions on rehabilitation and return from relief camps.

Meitei leaders have countered this position, arguing that the demand reflects an ethnocentric territorial claim and that humanitarian issues should be addressed alongside negotiations, as no area is exclusively inhabited by a single community.

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