Inter-government pacts don't include graft clause: MoD

Anti-corruption clauses are not included in inter-governmental agreements, Defence Ministry officials observed on Monday, responding to a news report that claimed such clauses were dropped from the controversial Rafale deal.

“Integrity pacts (meant to stop corruption in defence deals) are not meant for agreements between two governments. Such agreements are only for those cases when a commercial agreement is signed between the Defence Ministry and a vendor,” Air Marshal S B P Sinha (rtd), who headed the seven-member price negotiation team for the Rs 59,000 crore (7.87 billion Euro) contract to buy 36 combat jets from France, told DH.

Sinha said there might be occasions when members of the negotiation team (comprising officials from Department of Defence, Department of Defence Production, Department of Defence Finance and Air Headquarters) differed on a particular issue, but the final report was unanimous in its recommendation.

Defence Ministry officials point out that Defence Procurement Procedure 2013 has provisions (clauses 71 and 72) that allow the government to deviate from standard purchase norms when a deal is signed with a foreign country.

“There may be occasions when procurement would have to be done from friendly countries. Such procurement would not classically follow the Standard Procurement Procedure and Standard Contract Document, but would be based on mutually agreed provisions by the governments of both countries. Such procurement will be done based on an inter-governmental agreements,” says Clause 71 of the DPP 2013.

The subsequent paragraph (Clause 72) says for any large value acquisition that requires long term product support, having an inter-governmental agreement is advisable because such an agreement can safeguard India's interest.

India's inter-governmental agreements with the US and Russia don't have any integrity pact, says an MoD official.

The explanations from the Defence Ministry follow a report published in Monday's edition of The Hindu in which it has been claimed that Narendra Modi government gave “major and unprecedented concessions” in the Rafale deal by dropping the anti-corruption clauses. The daily claims that the report is based on the documents that it has accessed exclusively.

The fresh disclosure comes on the eve of the submission of an audit report in the Parliament by the Controller and Auditor General that examined thee Rafale deal. The audit watchdog is learnt to have submitted a copy to the President's Office on Monday and is likely to place it in the House on Tuesday.