It has been established conclusively by the “stolen” documents published by The Hindu that three members of the Indian negotiating team, responsible for conducting the negotiations for the 36 Rafale fighter planes with French firm Dassault, had, in a June 2016 note submitted to the deputy chief of air staff and chairman of the Indian negotiating team, raised serious objections to some of the deal’s terms and conditions. These objections have been widely discussed in the media and elsewhere, but a few of the serious ones need to be mentioned here again as an aide memoire. The first objection was that the final price offered by the French government was 55.6% above the benchmark price. The final price was escalation-based while the benchmark price was firm and fixed. The second objection was that “the reasonability of the price offered by the French government is not established. Even the final price offer by the French government cannot be considered as ’better terms’ compared to the MMRCA offer and therefore not meeting the requirement of the joint statement” issued after the meeting between the Indian prime minister and the French president. The third objection raised by them was that the “additional commercial proposal of 1400 million Euros towards NRC for design and development ISE (India specific enhancements) was exorbitant and unrealistic”. The fourth issue raised was with regard to sovereign or government guarantee that would have resulted in cost savings for both sides. The French side neither agreed for providing sovereign/government guarantee nor bank guarantee, nor did it even offer corresponding reduction in price because of this factor.Also read | Why Does the CAG Have More to Say on the 2007 Rafale Process than the 2016 Deal? The fifth point raised by these three members was with regard to the delivery schedule of the 36 planes, which was slower than the 18 planes in fly-away condition under the MMRCA process. They also observed that “the delivery schedule being offered by the French side in the IGA is highly optimistic”.We also know that these issues were not resolved either at the level of the chairman of Indian negotiation team or at the level of the raksha mantri, and were ultimately settled by the cabinet committee on security which obviously overruled these very valid objections and decided to go ahead with the recommendations of the other four members which constituted a narrow majority of one in the seven-member negotiating team.The finance minister’s roleWhat did the Ministry of Finance do, though? I am raising this question even at this late stage because I find that the role of the finance ministry, specially of the minister of finance, despite being crucial, has received little or no attention either from the media or the others.Under the established procedure of the government of India, no cabinet note can be put up to the cabinet or any of its committees including the committee on security without the concurrence or comments of the ministry approved at the level of the finance minister himself. I also know from personal experience that all expenditure proposals are examined in great detail in the finance ministry. The proposal to buy 36 Rafale fighter planes from the French company Dassault was not only an important proposal, but also involved a huge cost to the exchequer – nearly Rs 60,000 crore. I have no doubt in my mind that the proposal would have been examined thoroughly by the officials of the Department of Expenditure in the Ministry of Finance, especially in the light of the objections raised by the three important members of the negotiating team. Did they deal with the objections and find merit in them? Did they dismiss them as of little or no consequence? Or did they agree with the raksha mantri’s suggestion and recommend to the finance minister that the issue should be referred to the cabinet committee on security for resolution? What was the view taken by the finance minister on this issue?Also read | If I Had Got More Than a Minute to Speak: Arun Shourie on Rafale Proceedings in SCThe finance minister is a crucial member of the cabinet committee on security, especially when it comes to financial issues. It is a responsibility cast upon the ministry by the Transaction of Business Rules and the General Financial Rules of the government of India. The finance minister cannot shirk this responsibility, however unpleasant it may be. It is also not open to him to suggest that he is unable to settle the objections raised at the official level, which should be done by the final decision-making body, namely the cabinet committee on security. So what view did the finance minister take? Did he support all or some of the objections raised and was overruled in the cabinet committee on security? If he failed to highlight these objections, then it should be considered a serious dereliction of duty on his part.The Ministry of Finance generally takes a conservative view of the expenditure proposals submitted by other ministries, examines them thoroughly and often alters the proposals or rejects them totally. The officers of the Ministry of Finance are trained to do so. It is highly unlikely, therefore, that they would have ignored the very valid objections to the deal raised by the members of the negotiating team. And if they did not, then what happened at the level of the finance minister? What view did he take on these objections?The file noting published by the Hindu newspaper also reveal that the PMO was carrying on parallel negotiations with the French side which was objected to by the officials of the Ministry of Defence. This objection was entirely valid because the prime minister and his office have no role in defence acquisition until the matter reaches the cabinet committee on security. Until then, his role is only as important as the role of the home minister or the external affairs minister, the other two members of the cabinet committee on security.Also read | With the RTI Law in Place, Rafale Deal Secrets Can’t Be Called ‘Stolen’But the two ministers whose role is crucial before that stage is reached are the defence minister and the finance minister. In this deal, it is these two who have failed the country, specially the finance minister who is charged with the responsibility to ensure that government funds are spent judiciously and not wasted. The finance minister who is now the chief blogger of the government has not only ruined the economy of the country but is also guilty of serious dereliction of duty in the Rafale deal.Untruth is not permanent, only truth is – and truth has a bad habit of turning up uninvited at the wrong time.Yashwant Sinha is a former finance minister of India.
