Can BJP counter Rafale with Bofors: Two contentious deals that are very different

New Delhi, May 09: The Bharatiya Janata Party (BJP) is playing its cards intelligently as the final two rounds of the seven-phase Lok Sabha elections 2019 draw near. Prime Minister Narendra Modi seems to be dragging former prime minister Rajiv Gandhi's name into current political discourse with an intention. It is well known that whenever Rajiv Gandhi's name starts doing rounds in political debates, what follows is the Bofors scandal and 1984 anti Sikh-Riots.

With the Congress going all guns blazing over Rafale allegations, the BJP wants to counter it by bringing the Bofors issue into the picture because the saffron party stands to gain if a comparison is made between the two contentious defence deals. Another purpose that Modi's remarks on Rajiv Gandhi serves is that it would elicit response from Rahul and Priyanka Gandhi, and that would weaken the relentless attack that the brother-sister duo have launched on BJP.

The BJP wants that the two deals be compared because the Bofors case not only cost Rajiv Gandhi his Prime Ministership, but also severely dented Congress' reputation way back in 1989.

The Congress on its part is trying to create a kind of political environment for the ruling party that the grand old party itself faced in late 1980s when Rajiv Gandhi's government eventually fell.

Why BJP stands to gain with Rafale-Bofors comparison?

Rafale and Bofors are defence deals, and the similarity stops at that. To try and draw parallels between the two would really be unfair because of fundamental differences in the manner in which these deals were executed.

Bofors deal was about corruption and kickbacks while Rafale allegations are about favouring a particular private entity as an offset partner over the state-owned Hindustan Aeronautics Limited. There are some allegations over the final agreed price of Rafale jets also, but that is a small part of the main allegation which is about alleged preference given to Anil Ambani's firm.

As of now, there are no allegations of corruption, kickbacks and a middleman facilitating the deal when it comes to Rafale issue. There is also no Quattrocchi-like element in the Rafale matter. But we ought to keep in mind former French president Francois Hollande's claim that Indian government pressed for Anil Ambani's firm to be made as an offset partner.

The two deals and the controversy: Explained

The Congress-led United Progressive Alliance government had put out a tender for 126 fighter jets and had planned to buy 18 Rafale fighters in fly-away condition from Dassault, with the remaining to be built in India along with the state-owned Hindustan Aeronautics Limited.

In 2015, however, on a visit to France, Modi announced a completely new deal, in which India would be getting 36 Rafale jets from France, all in fly-away condition. Under the terms of this Rs 59,000 crore deal, all the planes would be built in France, but Dassault would have to offset about 50 per cent of that cost in India. In this case, Dassault has to ensure that 50 per cent of the Rs 59,000 crore that India will be paying it for the Rafale aircraft ends up being invested in the Indian defence system.

The Rajiv Gandhi government decided to replace the old field guns and artillery with the induction of a bigger caliber 155 mm howitzers. A deal was signed in 1986 between the Indian government and Swedish Armament major AB Bofors for $285 million i.e. roughly about 1500 crores rupees. About a year later, on 16 April 1987, Swedish Radio alleged that Bofors paid kickbacks to people from a number of countries including top Swedish and Indian politicians and key defence officials to seal the deal. The middleman associated with the scandal was Ottavio Quattrocchi, an Italian businessman who represented the petrochemicals firm Snamprogetti. Quattrocchi was reportedly close to the family of Rajiv Gandhi and emerged as a powerful broker in the 1980s between big businesses and the Indian government.

Why are eyebrows being raised over involvement of Anil Ambani's firm?

Dassault is free to work with any Indian company to complete its offset obligations, subject of course to approval by the government. But soon after the agreement was completed, it became clear that the bulk of that Rs 30,000 crore that has to be invested in the Indian ecosystem will be channelled through Dassault Reliance Aerospace, a joint venture established between Anil Ambani's Reliance Aerostructure and Dassault.

What the opposition, especially the Congress, is now asking is why the HAL was sidelined. The question is pertinent in the sense that the original deal on Rafale was supposed to include the Hindustan Aeronautics Limited.