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Rafale deal: Modi govt waived anti-corruption clauses; and curious case of MoD financial advisor

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Rafale deal: Modi govt waived anti-corruption clauses; and curious case of MoD financial advisor

[vc_row][vc_column][vc_column_text]The Rafale deal affair got muddier with reports raising further questions about Narendra Modi government’s actions.

A report by The Hindu said the Indian government made major and unprecedented concessions, waiving critical provisions for anti-corruption penalties and making payments through an escrow account dropped days before the signing of the inter-governmental agreement (IGA).

Modi has been claiming to be waging a relentless war against corruption and justifying cases against political rivals on this basis.

Also significant is the fact that this and other important information on the “parallel negotiations” conducted by the Prime Minister’s Office and the National Security Adviser seems to have found been withheld from the material submitted by the government to the Supreme Court of India, The Hindu reported.

Another report in India Legal mentioned the curious case of Modi government appointing an officer from the Indian Audit and Account Services (IA&AS) as financial advisor to the Ministry of Defence (MoD). The post is traditionally reserved for Indian Defence Accounts Service (IDAS) cadres.

The IA&AS officer in question, 1984 batch’s Gargi Kaul, is sister-in-law of Supreme Court judge, Justice Sanjay Kishan Kaul who was part of the three judge bench of the apex court, also comprising Chief Justice Ranjan Gogoi and Justice KM Joseph, which had, on December 14, dismissed a bunch of petitions demanding a court-monitored investigation into alleged irregularities committed by Prime Minister Narendra Modi’s government in finalising the Rafale deal.

A day after the Supreme Court verdict, on December 15, Gargi Kaul was empanelled by the Centre at the rank of Secretary, Government of India. Ten days later, on December 24, she was transferred to MoD. Prior to her transfer, Kaul was serving as Additional Secretary and Financial Advisor to the Ministry of Civil Aviation.

While this report has not yet drawn much attention or ruffled any feathers outside IDAS, The Hindu’s report had the Congress launch a fresh attack on Modi government.

Congress chief Rahul Gandhi Monday launched a fresh salvo at Prime Minister Narendra Modi. Quoting The Hindu report, the Congress chief said, “Every defence deal has an anti-corruption clause. Reports suggest that the PM removed the anti-corruption clause. It is clear that the PM facilitated loot.” Taking to Twitter, he wrote, “NoMo anti-corruption clause. The Chowkidar himself opened the door to allow Anil Ambani to steal 30,000 Cr. from the IAF.”

The Congress said the Rafale deal is “unravelling” faster than the government thought, with issues such as “parallel negotiations” by the PMO and changes in the standard defence procurement procedure coming to the fore.

Senior Congress leader and former finance minister P Chidambaram said in a series of tweets, “First, it was the loading of the India Specific Enhancement costs on 36 aircraft instead of 126 aircraft giving a bonanza to Dassault. Then it was the revelation that ‘parallel negotiations’ were being carried on by PMO undermining the efforts of the Indian Negotiating Team.”

Now it is revealed that crucial changes were made to the clauses in the standard Defence Procurement Procedure, he said. “No sovereign guarantee, no bank guarantee, no escrow account, yet a huge amount was paid as advance,” Chidambaram alleged.

Lashing out at the Modi government, he said, “No penalty clause for undue influence, no clause against agency commission, no clause for access to suppliers’ accounts, and Dassault goes laughing all the way to the bank.”

Citing the media report, Congress’ chief spokesperson Randeep Surjewala said, “Modiji, after waiving off sovereign guarantee in Rafale deal, you also waived off the ‘anti-corruption measure’ of a ‘safeguard Escrow A/c’! What is the corruption you wanted to hide?”

The whole country is abuzz that “chowkidar chor hai”, he said.

The Congress on its official Twitter handle, asked: “Throwing all good sense to the wind, the PMO also discarded the advice to create an escrow account under the control of the French Govt to release payments from India. Instead it chose to pay Dassault upfront in advance. Who was the PMO trying to benefit?”

“After the PMO forced the waiver of a sovereign guarantee, it now turns out the PMO asked for the WAIVER of standard ANTI-CORRUPTION clauses. Who was the PMO trying to shield? There is no doubt that #ChowkidarChorHai”

The Hindu report states that the government gave “major and unprecedented concessions” to the French side when the Rafale deal was signed between the two countries. This included dropping of “critical provisions for anti-corruption penalties and making payments through an escrow account”.

According to the media report, the high-level political intervention meant that standard Defence Procurement Procedure (DPP) clauses on “Penalty for use of Undue Influence, Agents/Agency Commission, and Access to Company accounts” of Dassault Aviation and MBDA France were dropped by the Modi government.

The newspaper further cites official documents that reveal that the Defence Acquisition Council (DAC) chaired by the then Defence Minister, Manohar Parrikar, met in September 2016, and “ratified and approved” eight changes in the IGA, supply protocols, offset contracts and offset schedules. The agreement and the documents had been approved by the Cabinet Committee on Security chaired by Prime Minister Narendra Modi before that on August 24, the report adds.

The most significant among these eight changes, recorded in a note signed by Vice Admiral Ajit Kumar, DCIDS (PP&FD) who was the member-secretary of the DAC, is at sub-para (c). This states: “Non-inclusion of the Standard DPP Clauses related to ‘Penalty for Undue Influence,’ ‘Agents/Agency Commission’ and ‘Access to Company Accounts’ in the Supply Protocols.”

The Hindu further quotes a dissent note by signed by three members of the Indian Negotiating Team that said: “…it is not advisable to sacrifice the basic requirement of financial prudence.”

The Rafale deal was signed between India and France under the terms of DPP-2013. Despite the procedure stating explicitly that the Standard Contract Document “would be the guideline for all acquisitions”, the Indian government chose to remove these clauses from the supply protocols with the two private defence suppliers, the report says.

The Hindu in its report says this was significant because 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.

After the introduction of a letter of comfort, another proposal that was turned down was one proposed by former defence bureaucrat Sudhanshu Mohanty

This came on the back of another turned-down proposal to have an escrow account operated by the French government. The Indian government would then release money to the account and France would make further payments to the firm as per terms agreed to by both governments as per the IGA.

“This would make French Govt. morally and materially responsible for the procurement so proposed,” Mohanty is quoted as saying in a separate note reported by The Hindu.

The newspaper had earlier reported on the defence ministry’s reservations to “parallel negotiations” conducted by the PMO in the deal.

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Punjab Congress faction games hold up who will lead party as poll approaches

The Congress leadership is expected to finalize the new Punjab Congress chief soon as factions oppose Amarinder Singh Raja Warring continuance as chief.

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mallikarjun-kharge

The Congress leadership is likely to decide the name of a new Punjab Pradesh Congress Comittee (PPCC) president in light of the growing factional differences emerging within the party state unit.

The decision by party president Mallikarjun Kharge on choosing the head of the state unit is likely to be finalized after he takes note of other senior leaders’ opinions on the matter, as differences over the continuation of Amarinder Singh Raja Warring as PPCC president has led to former Chief Minister Charanjit Singh Channi pitching his hat in the ring.

The leadership crisis has reflected the diverging interests of opposing factions in the Punjab Congress. Channi has the backing of several party leaders including Bharat Bhushan Ashu, Gurpreet Singh Kangar, Darshan Singh Brar, and Nazar Singh Manshahia, among other supporters of Channi, while another faction is supporting incumbent chief Warring.

The Congress needs to stem the crisis soon since the state is headed for elections next year as the term of the Bhagwant Mann-led Aam Aadmi Party government winds down. Many in the party have said that having a widely accepted state leader can strengthen the organizational structure.

The delay in decision-making has caused speculation with some senior leaders meeting BJP heavyweights in Delhi. Though these leaders have dismissed any rumours of switching sides, the strain among the factions is telling on party unity. But given the way several Rajya Sabha MPs of the Aam Aadmi Party switched to the BJP, nothing can be ruled out as election fever picks up.

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Congress MP Manish Tewari says terror must end before India-Pakistan dialogue resumes

Congress MP Manish Tewari has questioned calls to restart India-Pakistan dialogue, arguing that meaningful talks cannot resume until Pakistan takes verifiable action against terrorism.

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Congress MP says decades of peace initiatives have repeatedly been followed by terror attacks and calls for verifiable action against terrorism before any engagement

Congress MP Manish Tewari has questioned renewed calls to resume dialogue between India and Pakistan, saying any discussion with Islamabad must first address the issue of cross-border terrorism. Responding to an appeal by 117 eminent personalities from both countries seeking the restoration of diplomatic engagement, Tewari asked whether such talks could be meaningful without concrete action against terror infrastructure.

Speaking on Friday, the Congress leader said successive Indian governments had consistently attempted to improve relations with Pakistan, but those efforts were repeatedly undermined by terrorist attacks.

According to Tewari, governments led by P.V. Narasimha Rao, H.D. Deve Gowda, I.K. Gujral, Atal Bihari Vajpayee, Manmohan Singh and Prime Minister Narendra Modi all pursued dialogue with Pakistan through formal negotiations or backchannel diplomacy. However, he claimed that each attempt was followed by acts of terrorism.

Calls for proof of dismantling terror infrastructure

Tewari said the key issue was whether Pakistan had provided any verifiable assurance that it had dismantled its terror infrastructure.

Referring to former Pakistan President Pervez Musharraf, he said a public commitment had been made after the Parliament attack to act against terrorism, but the assurance was later withdrawn. He added that similar commitments made during the tenures of former Prime Ministers Manmohan Singh and Narendra Modi also failed to produce lasting results.

Questioning the appeal for renewed engagement, Tewari said those advocating talks should clarify what specific issues they intended to discuss while the threat of terrorism remained unresolved.

References Pahalgam terror attack and Indus Waters Treaty

The Congress MP also referred to the Pahalgam terror attack in April 2025, saying it further reinforced India’s concerns regarding terrorism.

He noted that India’s position became even more firm following the attack, pointing to the suspension of the Indus Waters Treaty as part of the government’s response.

Commenting on the timing of the letter seeking renewed dialogue, Tewari said India had consistently maintained that terrorism and bilateral talks could not proceed simultaneously. He also reiterated the government’s position that it would not differentiate between terrorists and those responsible for directing such attacks.

Peace remains desirable, but security comes first

While acknowledging that millions of people across South Asia aspire for lasting peace, Tewari argued that meaningful dialogue was not possible as long as terrorism remained a continuing threat.

He said India must first receive credible assurances from Pakistan, beginning with an end to the export of terrorism, before considering any resumption of diplomatic engagement.

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TVK alleges Rs 35 crore MLA bribery bid as Tamil Nadu political row escalates

Allegations of a Rs 35 crore bribery offer to a TVK MLA and an FIR against Senthil Balaji’s brother have intensified political tensions in Tamil Nadu, with the TVK, DMK and AIADMK trading accusations.

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The alleged attempt to destabilise the Vijay-led TVK government has triggered a major political confrontation in Tamil Nadu, with the ruling alliance and the opposition accusing each other of engaging in horse-trading and attempts to influence legislators.

The controversy intensified after Chennai Police arrested three people on Wednesday following a complaint by a TVK MLA, who alleged that he was offered ₹35 crore by representatives of a consultancy firm in exchange for supporting a move against the Assembly Speaker. According to the allegations, one of those arrested is reportedly associated with DMK MLA Senthil Balaji and his brother, Ashok.

An FIR has also been registered against Ashok, the brother of Senthil Balaji, over allegations that he attempted to bribe TVK MLA N. Elaiyaraja.

TVK accuses DMK of targeting its MLAs

TVK alleged that the DMK has been attempting to lure its legislators for several weeks in an effort to destabilise the government.

Tamil Nadu minister and senior TVK leader CTR Nirmal Kumar claimed that several TVK MLAs, along with legislators from alliance partners, had been approached over the past 40 days. He alleged that the party had now been “caught red-handed” after the police action and accused the DMK of trying to purchase the support of a TVK MLA for ₹35 crore.

Nirmal Kumar also alleged that a close associate of Senthil Balaji had threatened a TVK legislator and further claimed that former chief minister MK Stalin and Leader of Opposition Udhayanidhi were attempting to create a political crisis. He rejected allegations that the TVK itself was involved in horse-trading, asserting that the ruling alliance remained secure with the support of its partners.

According to the allegations cited by agencies, the purported plan involved securing the simultaneous resignation of 15 TVK MLAs to bring down the Vijay-led government.

Opposition rejects allegations

The DMK dismissed the accusations, alleging that the Vijay-led government was trying to divert attention from its own shortcomings.

DMK leader TKS Elangovan said the government had failed to fulfil its promises and claimed that the TVK alliance itself was engaged in horse-trading. He questioned the allegation that the DMK would seek to engineer political instability under the present circumstances.

The AIADMK also criticised the ruling party, accusing it of attracting legislators from rival parties while questioning its commitment to public welfare. AIADMK chief Edappadi K. Palaniswami said that political manoeuvring and shifting alliances had overshadowed governance.

Alliance partners support TVK government

The TVK’s alliance partners backed the government during the controversy.

Congress MP Praveen Chakravarty questioned why the DMK was allegedly seeking to bring down the government instead of remaining in the opposition, asking why it was in such a hurry to return to power.

VCK leader SS Balaji also reiterated his party’s support for the TVK government for its full five-year term. While stating that he was not aware of the specific allegations regarding attempts to poach legislators, he said that encouraging MLAs to resign was not a healthy democratic practice and reaffirmed the alliance’s commitment to the government.

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