NDA's Rafale deal 2.8% cheaper than UPA-era deal: CAG

CAG report on defence deals tabled in Parliament

The BJP-led NDA government's Rs 59,000 crore deal to buy 36 Rafale fighter jets for the IAF from France is 2.86% cheaper than a similar deal pursued by the Congress-led UPA government, the Comptroller and Auditor General (CAG) says in its latest report.

In the long-awaited document tabled in Parliament on the last day of the last session of the 16th Lok Sabha, the CAG compared purchase of two squadrons of the combat jets with the previous government's plan to buy the same aircraft.

For easy comparison, the CAG did its own calculation on what could have been the prices for 36 French combat jets as per the terms and conditions negotiated by the UPA government. The auditor describes it as "Aligned Price" in the 157-page report.

"Overall, it may be seen that as against the Aligned Price as estimated by the audit, the contract was concluded at 2.86% lower than the Audit Aligned Price,” says the CAG report.

Within minutes, the political battle on the Rafale issue resumed with Union minister Arun Jaitley taking to the Twitter to proclaim: “Satyameva Jayate – the truth shall prevail. The CAG report on Rafale reaffirms the dictum.”

Congress president Rahul Gandhi discredited the report and alleged that the deal was concluded by the NDA to favour industrialist Anil Ambani, whose company is one of the offset partners in the mega-deal.

The CAG broke down the contract into 11 categories and compared the prices in percentage terms in each of these categories. Actual prices were not disclosed in the CAG report due to national security concerns and the confidentiality clauses associated with the pact signed between India and France in 2016.

The prices were compared on (1) flyway aircraft package (2) services, products – operational support equipment and technical assistance, documentation and programme management (3) India specific enhancement (4) standards of preparation (5) engineering support package (6) performance-based logistics (7) tools, testers and ground equipment (8) weapons package (9) role equipment (10) training of pilots and technicians and (11) simulator and simulator training aids annual maintenance.

The report found that the NDA government paid more on engineering support package (6.54%), performance-based logistics (6.54%) but paid less on India specific enhancement (17.08%) and weapons package (1.05%). The overall price reduction was 2.86%.

However, the CAG pointed out that the price could have been brought down further had the Indian Negotiating Team taken into account the unsolicited offer from EDAS to sell Eurofighter Typhoon at a 20% discount. While the Defence Ministry rejected the EADS offer, the CAG noted that the negotiators could have leveraged the same for a better price.

In December 2018, the Supreme Court exonerated the NDA government from any wrongdoing in the contentious defence deal.

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NDA's Rafale deal 2.8% cheaper than UPA-era deal: CAG

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