Chidambaram questions Centre over Rafale as CAG pulls up Dassault for offset obligations

Lashing out at Modi government over CAG audit report tabled on Defence Offset Performance, former Finance minister P Chidambaram, on Thursday, asked if report opened a can of worms about Rafale deal. Pointing out at n-transfer of techlogy by French manufacturer Dassault as per CAG report, he asked if government could verify if transfer was done. Modi government tabled 29 key audit reports of Comptroller and Auditor General (CAG) on Wednesday, as Opposition boycotted parliament due to suspension of 8 MPs. 

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CAG report on Defence Offset Performance tabled

As per audit report tabled in parliament, French aero major Dassault Aviation and European missile maker MBDA are yet to fulfil ir offset obligations of offering high techlogy to India as part of deal relating to procurement of 36 Rafale jets. CAG also ded that it did t find a single case of foreign vendors transferring high techlogy to Indian industry, pegging defence sector as 62nd out of 63 sectors receiving FDI. ​ first batch of five Rafale jets arrived in India on July 29, nearly four years after India signed an inter-governmental agreement with France.

Under India's offset policy, foreign defence entities are mandated to spend at least 30 per cent of total contract value in India through procurement of components or setting up of research and development facilities. se rms are applicable to all capital purchases above Rs 300 crore me through imports and can be me through FDI, free transfer of techlogy to Indian firms and purchase of products manufactured by Indian firms. CAG also summed that though vendors failed to keep up ir offset commitments, re was effective means of penalise m - especially when contract period of main procurement is over.

CAG said 48 offset contracts were signed with foreign vendors from 2005 to March 2018 with a total value of Rs 66,427 crore, and Rs 19,223 crore worth of offsets should have been discharged by vendors by December 2018. But amount discharged by m was only Rs 11,396 crore, which was only 59 per cent of commitment. Moreover, only 48 per cent (Rs.5,457 crore) of se offset claims submitted by vendors were accepted by Ministry with remaining offset commitments of about Rs 55,000 crore would be due to be completed by 2024. 

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(With PTI Inputs)