‘Rafale’ vs ‘Bofors’: Can the two defence deals be compared?

New Delhi, Sep 25: The Congress is striving hard to build a narrative around the Rafale deal that can have effect similar to what Bofors scandal had on 1989 Lok Sabha Elections. The Bofors case not only cost Rajiv Gandhi his Prime Ministership, but also severely dented Congress' reputation.

Before getting into the nitty gritties of comparing the two defence deals, what must be said is that the environment that the Congress is trying to create is similar to what it had faced in the late 1980s. The Rajiv Gandhi government under the growing pressure from public and opposition had to set up a Joint Parliamentary Committee (JPC) to probe the Bofors allegations on August 6, 1987. And even now the demands for JPC probe are only gaining momentum.

It really is sad that every time a major defence deal is struck, fingers are pointed at it. What complicates matters further in case of defence deals is that because it concerns national security a lot of details must be kept under the shroud of secrecy which unfortunately leaves scope for foulplay.

Coming to comparing Rafale with Bofors, yes both are defence deals but to draw parallels between the two would really be unfair because of fundamental differences in the manner in which these deals were executed.

Rafale vs Bofors: Fundamental differences

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. In other words, allegations over Rafale deal are related to change in certain clauses and terms which were agreed upon during the UPAs term.

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% of that cost in India. In this case, Dassault has to ensure that 50% 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.

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 then again, former French president Francois Hollande's claim that Indian government pressed for Anil Ambani's firm to be made as an offset partner is bound to raise eyebrows.

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 channeled 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.

If the government is not able to answer all these questions being raised in a convincing manner then Rafale can indeed become a 'Bofors moment' of the Modi government, as said by BJP rebel Arun Shourie.

The Reliance, on its part, has insisted that the government has not shown it any favours, since the picking of the offset partner is left to Dassault.