Rafale: Modi’s Deal Cost India At Least INR 27317700000 (Two Thousand Seven Hundred Thirty One Crore) More Compared To UPA’s
A simple arithmetic calculation based on figures contained in the CAG report brings this out.
Headlines have been grabbed by the CAG report’s claim that Modi government’s deal for 36 Rafale aircraft was 2.86 per cent cheaper than what it would have been under the bid offered — with negotiations incomplete — by Dassault to the UPA government in 2007. But in the very next paragraph, the auditor says that the cost of bank guarantees has not been considered which should have been deducted from the overall amount.
It is surprising that a CAG report which went into great details to make all the complex calculations about every single pin chose not to include the figures for the bank guarantee in the table summarising the comparison. However, based on the figures already in the public domain, it is not hard to assess the comparison:
(a) Cost of final deal: €7878.94 million (including aircraft package from Dassault Aviation for €7168.53 million, and weapons package provided by MBDA France at €710.41 million)
(b) CAG’s aligned costs: €8102.57 million (Based on 2.86 per cent lower figure)
(c) The difference of 2.86 per cent: €231.73 million (say, €232 million)
So, the CAG claims that Modi government saved €232 million without considering the impact of bank guarantee costs.
Now, let’s include the cost of bank guarantee in this calculation, as per INT report:
(d) Cost of bank guarantee as per INT note published in The Hindu: €574 million
(e) Modi govt paid extra: €574 million – €232 million = €342 million
That makes the Modi government’s deal expensive by at least €342 million or 4.22 per cent more expensive.
The only question that is left is why did the CAG not do this simple arithmetic itself? It can perhaps be said that it was to let Modi government get away scot-free by managing the headlines, which it has done. But truth has a way of catching up and it will, sooner rather than later.