N Ram, Director of Kasturi & sons limited & publisher of the Hindu, published an article in the newspaper on how the price of Medium Multi-Role Combat Aircraft (MMRCA), Rafale bought by Modi government was 41 percent higher to the market price. “Big increase in Rafale’s price came because a deal bypassing mandated procedures and made in the face of official objections resulted in €1.3 billion ‘non-recurring’ cost attributed to the ‘Design and Development’ of 13 India Specific Enhancements being spread over 36 instead of 126 aircraft,” wrote N Ram.
However, the article falls flat on facts. To give a sensational headline, the Hindu did not calculate the escalation in India specific enhancements (ISE) and kept it flat for the price calculation in 2007, 2011, and 2015. In the headline, it was prominently highlighted that the deal was 41 percent but in subsequent paragraphs, N Ram himself rights that after the escalation addition, the Rafale price is just 14.2 percent higher. “When the escalation formula was applied, the price per aircraft agreed to by the NDA government turned out to be 14.20% higher than the proposed price per aircraft when the commercial bid was opened in November 2011 under the UPA government,” wrote N Ram in the article.
True to its obsession with creating sensations, The Hindu’s news headline proclaimed that “Modi’s Decision to buy 36 Rafales shot the price of each jet up by 41%”. This calculation includes development costs as mentioned above. Now, it is common sense that when one calculates differences in prices, the prices should be of the same year. Take the UPA deal’s price of 2007 and the NDA deal’s price of 2015, disregarding the value of money changing with time completely, one can calculate price escalation from 2007 to 2015. Then if the difference in Rafale prices is calculated, the NDA deal turns out to be only 14% costlier. The defense spokesperson released a detailed response to N Ram’s article.
Rejoinder. Inaccurate facts, devoid of any new arguments. All issues have been answered in detail by @DefenceMinIndia in an open debate in Parliament. Selective picking of facts to create doubts be avoided. Detailed statement is attached https://t.co/XVRraUW7Bm pic.twitter.com/K0m7E1K5Lb
— Defence Spokesperson (@SpokespersonMoD) January 18, 2019
Finance Minister Arun Jaitley also pointed out the finding by The Hindu to be incorrect and tweeted, “The new Article on Rafale is based on fudged arithmetic – ignore the escalation of the 2007 non-deal offer and compare it with the 2016 price and invent a scam.”
The new Article on Rafale is based on fudged arithmetic – ignore the escalation of the 2007 non-deal offer and compare it with the 2016 price and invent a scam.
— Arun Jaitley (@arunjaitley) January 18, 2019
All in all, the Rafale deal is a step in the right direction. It will provide a much needed lease of life to the Indian Air Force. It is sheer foolishness to insinuate that it is in any way similar to the Bofors deal. It seems that as elections approach, the fake news factory is running to its full capacity and it comes as no surprise that journalists like N Ram choose to peddle lies about Rafale. It must be disappointing for the readers to see an institution like the Hindu, which was started in 1878 in order to aid India in her struggle for freedom against British rule, acts as if its current motto were to achieve Freedom from Facts.