Rafale Deal Controversy Once more exposes to which abysmal depth government-level corruption has gone



After testing out a number of global options, the Indian Air Force back in 2012 intended to replace the ageing Russian fighter jet planes, put the 2-engine Rafale aircraft, built by France’s Dassault, and the Eurofighter Typhoon on its final list. The then Congress-led UPA government issued a tender for 126 fighter jets and, because of a lower bid offer, planned to buy 18 off-the-shelf Rafale jets in fly-away condition from Dassault Aviation of France, with the remaining 108 jets to be built in India by the Hindustan Aeronautics Limited (HAL), a Public Sector company. But the said plan was abandoned after the BJP government came to power. In 2015, on a visit to France, Modi announced a completely new deal, in which India would be getting 36 Rafale jets from France. In September 2016, the Indian and French governments signed an inter-governmental agreement which is now known as the “Rafale deal”. This deal stipulated that India would buy 36 off-the-shelf Dassault Rafale twin-engine fighters for a price estimated to be Rs. 59,000 crore or 7.8 billion Euros. But, as per an offset clause in the deal, Dassault would have to invest 50 per cent of the total order cost i.e. Rs 30, 000 crores in local contracts in India. Offset clauses are conditions under which the suppliers are obliged to spend a portion of their contract amount in a certain way in the buyer’s country. In this case, Dassault had to ensure that 50% of the Rs 59,000 crore or about Rs 30,000 crore would be invested in the Indian defence system like military aeronautics-related research programmes and local production of Rafale components.


Points of controversy over the deal

Two aspects of the deal have first raised  eye-brows, then precipitated murmur and finally created a commotion. First one is that the BJP government has been paying much higher price for the acquisition of the jets (Price of 126 jets as decided during the previous UPA government in 2012 is now being paid for buying only 36 jets i.e. over 300% increase in price). Secondly, soon after the agreement was completed, it came to be known that state-owned HAL which has a 60 year long experience of manufacturing aircrafts, including fighter jets, has been removed. Instead, the bulk of that Rs 30,000 crore that has to be invested in the Indian defence system as per the deal would be channelled through Dassault Reliance Aerospace, a 49:51 joint venture established between Dassault and industrial tycoon Anil Ambani’s Reliance Aerostructure which has no past experience and expertise of manufacturing aerospace and defence equipment. Moreover, at the time of inking the Dassault deal with Anil Ambani, nearly all of the companies run by him were in serious debt. Disinvestment of his telecom ventures in favour of his elder brother Mukesh Ambani, involved transfer of assets worth Rs 35,000 crore including a 125-acre land at Navi Mumbai. The Anil Ambani group’s infrastructure divestment plan in favour of the Adani group, another giant monopoly house, amounted to Rs 18,800 crore. His ultra-mega Reliance Power collapsed even before it was able to commence production. The Anil Ambani group is reported to be probably the country’s biggest debt-heavy enterprise — much bigger than the combined exposure of fugitive Vijay Mallya, Nirav Modi and Mehul Choksi. Roughly, the Anil Ambani group is stated to have been carrying a total debt burden of Rs 1,00,000 crore. So, even from a pure commercial viewpoint of any profit-making enterprise, such a decision would obviously be nonviable.

How could then Dassault select such a heavily debt-burdened non-experienced Indian firm  for such a maiden joint venture in defence? There is every reason to smell a rat in the whole episode that insinuates towards some kind of insistence as well as diplomatic pressure on the part of the Indian government. Further, through this joint venture Dassault Aviation is slated to inject about over 100 million euro, the largest Defence FDI in a single location in India. How would Anil Ambani fund his part in this project? Questions and doubts are galore. Reports have suggested that Reliance, in some manner, will end up receiving as much as Rs 21,000 crore of the total Rs 30,000 crore offset expenditure. But that is not all. With location of the proposed joint venture in an SEZ, a host of other benefits  are awarded like non-payment of taxes, availability of water and electricity at nominal expenses, no routine custom shipment inspection, no licensing for production and above all no obligation to abide by the labour laws. With all these accumulated benefits, some quarters claim the sum to be as high as Rs 45, 000 crore. When the toiling masses are back-broken by increasing burden of tax including the latest rising excise duty and cess on petrol-diesel, the top monopoly houses which are merrily defaulting bank  loans, misusing funds raised from public for financing industrial projects (an astronomical sum of $190 million or about Rs 1,330 crores was raised from the stock market through the IPO route for the proposed Reliance Power which never took off) are not only being bailed out through various waivers, concessions and grant of fresh loans often by flouting norms and principles but are also craftily helped even to enter into fishy foreign collaboration and that too in defence sector. This is a glaring example of ‘military-industrial complex’, an unholy alliance between a bourgeois country’s military, the defence industry, the government and the industrial houses, which rules the country and represents vested interest which influences public policy and spending from public expenditure mainly for frantic rearmament and militarization of industry.


Surfeit of untenable and contradictory arguments to suppress truth

However, there has not been  any dearth of counterfeit arguments on the part of the BJP government in its desperate cover-up exercise. First of all, it contended in last November that the price negotiated by the BJP government was much lower than the price negotiated by the erstwhile Congress (UPA) government and the exact price would be revealed later. But in March, the union defence minister informed the Rajya Sabha that as per Article 10 of the inter-governmental agreement, revelation of price and other classified information is prohibited. It was a queer logic since classified information like technical capabilities of the aircrafts could well be deemed as confidential from the point of national security, but  there is nothing that prevents the government from disclosing the commercial aspects of the contract to Parliament. In fact, a document released by two former NDA ministers cited a statement issued by Anil Ambani’s Reliance Group which mentioned the new price working out to be Rs 1,660 crore per plane. Secondly, then Joint Secretary & Acquisition Manager (Air) in the Ministry of Defence who had been part of the Contract Negotiations Committee (CNC) is reported to have raised questions about the deal’s benchmark price and put his objections on record. One of the key objections raised by him was reportedly over the benchmark price for the French aircraft in the new 36-Rafale deal which had been pegged higher than the benchmark price for the shelved 126-Rafale proposal. His objections delayed the Cabinet note approving the deal and its signing which only happened after his objections were “overruled” by another senior MoD official, Director General (Acquisition). The note, as part of the Rafale deal file, is stated to be currently with the office of the Comptroller and Auditor General (CAG) who is studying the deal and is likely to submit its report by the winter session of Parliament in December. The CAG report, as per media report, is likely to refer to the note and will also mention how these objections were over-ruled. The BJP government is tight-lipped about this note. Next argument of the BJP government has been that it was the exclusive preserve of Dassault to choose its joint venture partner. This has been questioned by the critics who point to the offset clause guideline that requires government approval for choosing any offset partner. Thirdly, the union defence minister claimed that “no offset contracts have been signed”. But the joint-venture between Reliance and Dassault has been consistently stating in the press releases that it will be carrying out the French company’s offset obligations. In fact, the foundation stone for Dassault Reliance Aviation Limited’s manufacturing facility at the Dhirubhai Ambani Aerospace Park located in the Mihan SEZ adjoining Nagpur International Airport was laid in October last with Union BJP Minister Nitin Gadkari, Maharashtra BJP Chief Minister Devendra Fadnavis and French Defence Minister Florency Parly in attendance. The government further sought to defend the deal by saying that HAL was not fit for the deal because it had no experience of manufacturing warplanes. But, T Suvarna Raju, who was heading HAL till 31 August 2018 openly questioned the claim. He even asked why the Union government was not putting out the files in public which would unravel the truth.  When HAL could build a 25-tonne Sukhoi-30, a fourth-generation fighter jet that formed the mainstay of the air force, from raw material stage, then how could anyone doubt HAL’s ability, he added. On 18 September last, union defence minister said HAL was “dropped” from the deal when the UPA was in power. But the fact is that the government to government agreement between India and France was signed in April 2015 when the BJP was in power. Another evasive strategy of the BJP government has been to plead that the government had no role in the decision of Dassault to choose its Indian partner for the joint venture. But Mr.Hollande, the former French President who was in power when the deal was finalized openly declared that the Indian government had proposed Anil Ambani’s name as the offset partner for Dassault leaving the French government with no choice. The French government further reiterated that it is “in no manner” involved in choosing French companies’ industrial partners for projects in India.It is also reported in the media that the deal had materialized during a closed door meeting in France between Prime Minister Modi and the French President Hollande in 2015. During that visit of the Prime Minister to France, neither the defence minister nor the foreign minister accompanied him. Only Anil Ambani had been with him. Caught napping, the defence minister is reported to have asked two French journalists to leave when she was addressing an off-the-record briefing at the BJP headquarters in Delhi on the Rafale issue on 24 September last. Visibly shaken, the BJP leaders and ministers are now beating about the bush, seeking to deflect attention to other non-related issues and trying to dodge the main question by being involved in a slugfest with its principal parliamentarian opposition party, the Congress.


Mock fight between the Congress and the BJP

It is well-known to all that there were a slew of shady deals, mega scams and financial scandals during the Congress rule as well. Both the BJP and the Congress are trusted representatives of the ruling monopolists and vie with each other only for power. As the capitalist system in its decadent moribund stage is utterly corrupt, out and out anti-people and reactionary to the core, neither the Congress nor the BJP or any other party subservient to and defender of bourgeois class interest can remain insulated from corruption, malfeasance and misfeasance. But the point is that by raising finger at the misdeeds of the Congress government, a gross irregularity on the part of the BJP government cannot be justified. Whenever logic ceases to act, one is apt to choose the other way. Similarly, the Congress which is now upping its ante against shady arms deals and the reaching out of undue benefits to the top monopoly houses is also doing so not out of any principle or moral standpoint but simply to woo public sentiment to score brownie points at the hustings. The ongoing slugfest between the Congress and BJP over the Rafale deal is nothing but a mock fight for public consumption.


Rampant corruption is the stamp of reactionary capitalist system

It is pertinent to mention here that with capitalism as a world system becoming obsolete and reactionary, rampant all-pervading corruption has become its hallmark. A spate of unfolding mega scams like Bofors gun, Kargil Coffin procurement, Agusta Westland, Adarsh Housing and now Rafale prove that the defence sector has become a den of corruption in capitalist India. The government of India has been spending lakhs of crores of rupees on defence by allocating over 12% of union budget for purchase and manufacturing of arms. Previously, manufacturing of arms was under the aegis of the government sector. But consequent on implementation of the ruinous policy of globalization-liberalization-privatization, such a key and crucial sector like defence has been opened to the private operators meaning giant monopoly houses. Going a step further in that direction, the BJP government unveiled a ‘Strategic Partnership’ policy for defence production aimed at creating and nurturing an ecosystem for private defence manufacturing in India. The government held that the defence industry would be a centrepiece of the much-hyped ‘Make in India’ slogan. Strategic partnerships with select Indian firms was stated to be essential to significant private sector participation in defence manufacturing. Not only that. The BJP government in 2016 announced, what it termed, a “radical liberalisation” of the Foreign Direct Investment (FDI) regime. Under garb of that, a host of important sectors particularly the defence sector was opened up for even total foreign ownership with easing norm for 100% FDI. The country has already experienced several menacing instances of that without FDI, in which top military officials, ministers and bureaucrats, supposed to be the defenders and governors of the country, were involved. Even fingers were pointed at the ministers for having made individual gains through such deals and purchases.  Increased FDI in defence has undoubtedly widened the widespread corruption, bribery and kickbacks in the arena of arms deals. It is an utterly corrupt industrial-military complex which is now ruling the roost in the defence sector. The government is merrily bending, changing or framing laws at will to cater to the money-making and profit-maximization needs of the monopolists. In reciprocation, the monopoly houses are backing the ruling bourgeois parties like the BJP, Congress and others, both financially and politically, to ride to power or remain visible in the corridor of power. It is simply a give-and take arrangement and in course of that the public exchequer funded by way of squeezing even the last drop of blood of the progressively wretched people is plundered with alacrity. Rafale is a glaring manifestations of that.  Great Marx said long back: “The representation of private interests … abolishes all natural and spiritual distinctions by enthroning in their stead the immoral, irrational and soulless abstraction of a particular material object and a particular consciousness which is slavishly subordinated to this object.” (On the Thefts of Wood, in Rheinische Zeitung) How glaringly the prognosis is corroborated today.


Over-emphasis on defence spending

It is also worth to note that the Indian government has been spending over 3 lakh crores of rupees or about 12.5% of its budget on increasing military muscle in a country abounding in the dead, half-dead, beggars, diseased and suicides? How is that when the pressing need is to provide maximum relief and help to the millions of downtrodden impoverished countrymen bleeding white under ever-increasing burden of fiscal savagery, ongoing monstrous rise in the prices of essential commodities, mounting unemployment, spurt in retrenchment and job loss, drastic cut in wage and such other ruthless economic assaults, the government’s priority is found to be in diverting bulk resources to the so-called necessity of defence of the country raising fear of war and imminent danger posed to country’s security? Can any civilized government worth the name use artificially stimulated war phobia as a scarecrow to deny the people  the bare legitimate minimum? In fact, the very precipitation of a war-psychosis is detrimental to maintenance of peace and harmony inside the country. It is the teaching of history that even if a country faces an attack from an external enemy, it is the blazing patriotism of the countrymen which offers the ultimate guarantee to preservation of independence and sovereignty, and not the corrupt mercenary army. What is then the imperativeness to augment military capabilities? This is the moot question. And it is not that difficult to find the answer as well.


Class compulsion of the ruling bourgeoisie overrides people’s concern and interest

Throughout the world, imperialism-capitalism is mired in an unprecedented and insolvable market crisis created by the very laws of capitalism. With rapid fall in the purchasing power of the people because of relentless capitalist exploitation, the market is continuously squeezed at an escalated scale.  In such a situation, to somehow ward off the crisis, the ruling monopolists of the imperialist-capitalist countries have been, taking recourse to other means like injecting fund in speculative capital market and tilting more and more towards militarization of economy. This has become their compulsion from their ultimate goal of artificially stimulating the crisis-ridden market and somehow keep the capitalist economy rolling. Ruling Indian bourgeoisie is treading exactly the same path through its servitor governments. FDI in defence is necessarily a part and parcel of the agenda of militarization of economy that one and all capitalist countries are invariably adopting in these days of acute recession and market crisis of the world capitalist economy. Based on this spurt in production of weapons, an international market has been created for sale and purchase of armaments. As per the report of the Stockholm International Peace Research Institute (SIPRI), India accounted for 12% of the total global arms import from 2012–17, which is the highest in the world. So, both domestic and foreign monopoly houses are interested not only in deploying capital in arms manufacturing in India but also make money by way of craftily designed arms deals with the bourgeois governments, both past and present, in tow.

One can see how the BJP government which boasts of being the sole title-holder of ‘nationalism and patriotism’ is making way for the giant imperialist superpowers including the US imperialism and their giant war-merchant MNCs to make decisive inroad into the so crucial and sensitive defence sector and thereby posing a serious threat to the security, if not sovereignty, of the country. With this opening of the entire defence sector to them and along with that all military secrets, array of arsenal and other sensitive military-related information of the country would be at their disposal. Foreign-acquired domestic firms could be used for surveillance, infiltration and sabotage against the Indian people, even the Indian government, if required. This criminal compromise with the question of national security just for procuring or manufacturing state-of-the-art arms with foreign collaboration, at the same time fattening the coffer of the arms-merchant and the corporate bigwigs, the wing-less vultures, is akin to selling the country to the enemies.

Alongside economic compulsion, the ruling Indian bourgeoisie has a political compulsion as well. Every student of political economy knows that the ruling Indian capitalist class has attained imperialist character and is aspiring to emerge as a regional superpower. So, it needs to flaunt its military strength alongside financial muscle. At the same time, it needs befriending the imperialist superpowers starting from the US through cooperation in the field of militarized economy and by dint of that wrest some concessions from them and advantages elsewhere like making forays into foreign markets to invest their finance capital and sell goods, including arms to other countries.  For that purpose, the Indian bourgeois government is regularly participating in joint military drills with the imperialist superpowers. This, in fine, is the economic-political compulsion that has driven the ruling Indian monopolists to desperately develop closeness with imperialist powers like US, UK, France, Germany etc.  in particular, by entering into economic accords, nuclear treaties and defence pacts. Great Lenin once observed: “… pre-monopoly capitalism — which reached its zenith actually in the 1870’s — was by virtue of its fundamental economic traits, which found most typical expression in England and in America, distinguished by a, relatively-speaking, maximum fondness for peace and freedom. Imperialism, on the other hand, i.e., monopoly capitalism, which finally matured only in the twentieth century, is, by virtue of its fundamental economic traits, distinguished by a minimum fondness for peace and freedom, and by a maximum and universal development of militarism.” (Proletarian Revolution and the Renegade Kautsky) How prophetically it is vindicated today when capitalism following the inexorable course of history is now in its death throes and is trying desperately to survive by adopting all unethical, immoral and despotic means and using corruption as the main plank.


People must rise up to thwart this increasing attack on their life and livelihood

It goes without saying that it is the common toiling people who are the worst sufferers, economically as well as socially, morally and culturally because of this soaring and unbridled corruption at the high level of governance and power that be. So, it is imperative that the people have not just a roving but a probing eye in ferreting out the truth behind their escalating misery and penury as well as menacing rise in institutionalized corruption and the abject betrayal of the parties subservient to bourgeois class interest to the people’s cause. With every passing day, the vote-based bourgeois parties particularly the pseudo-Marxists like the CPI (M), CPI are moving away even from the path of whatever little movement they used to participate in earlier from electoral interest. The beckon-ing of pelf and power has become so irresistible that let alone extra-parliamentary movement, even there is no initiative to create a roar in the parliament over this large scale financial scams and scandals. Even during the Bofors scandal, there was much hue and cry. But not even a fraction of that is noticed in case of this Rafale scam. All protests or dissents end in issue of benign statements or stage-managed hurling of invectives.

But if people remain mute spectators to such dirty games, consider this spiralling corruption as fait accompli and hence not remediable, situation would worsen further. More crisis-ridden would be capitalism, more squeezed and dragged to the dregs will be the toiling millions while a bunch of crooks, parasites, frauds, scamsters and blood-suckers would thump around with impunity. Surely, that cannot be allowed to happen. True that so long as capitalism would be in existence, there would be more  cases like the Bofors and Rafale, may be of much more dimension and magnitude. It is also true that permanent remedy lies in revolutionary overthrow of capitalism by fulfilling necessary conditions and as logical culmination of the due process. But till the time that does not happen, it is not that nothing could be built up by the suffering enraged countrymen as a deterrent. Here comes the question acquiring necessary consciousness and then tread along the correct path illumined by that consciousness. This consciousness once attained would reveal that only what can work as an effective bulwark against this avalanche of corruption and malpractices is powerful assertion of people’s power crystallized in the form of united organized movement based on higher proletarian ethics, culture and morality and under correct leadership. It is the ambience of this mass movement, the realm of thought fostered by the spirit of this movement which will constitute an effective check on erupting corruption, scams and scandals.This is what our Party has been repeatedly urging upon. We once again call upon the people to brook no delay in closing their rank and come forward to spearhead that desired movement.


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