The Narendra Modi-led government waived off critical provisions for anti-corruption penalties as well as overruled financial advisers’ recommendations for an escrow account for the Prime Minister’s Office (PMO), days before the signing of the Rafale deal between India and France, reported The Hindu.

The report cites a note signed by defence ministry official Sudhanshu Mohanty which said that basic financial prudence should not be done away with as payments were being made to the private manufacturer and not the French government.

But members of the negotiating team told CNBC TV18 that defence procurement procedure rules also say that at times procurement is made from friendly nations for Geo Strategic advantages and they need not follow standard procurement procedures and would be based on mutually agreed provisions.

Ajai Shukla, columnist and former colonel; Nirdosh Tyagi, former air marshal; Narendra Taneja, spokesperson, BJP and KC Singh, former diplomat, discuss the issue.

Ajai Shukla said, “I am at a loss to understand what geo-strategic advantage gained from removing a corruption clause from the deal. There are serious questions raised over the issue of how an Inter-Governmental Agreement and supply protocols with the various suppliers can be cleared by the cabinet committee on security and then later the defence ministry asked to remove the anti-corruption clauses form that deal."

Nirdosh Tyagi said, “If you take procurement from the US none of these clauses are applicable. The issue is no different from what has been brought out earlier that there are deviations from standard contract and these deviations are permitted. They are there because they are not required. So when you are dealing with government and not in a multi-vendor situation - in this case the multi-vendor and the price discovery had already been done so it was just taking a deal forward which was stuck for some other reason."

KC Singh, “We must make a distinction because the air marshal referred to the foreign military sales of the US. Now the US has a standard procedure for that. One of the arguments in going via the FMS is that you don’t get the best price. In this case, there appears to avail of the inter-governmental agreement when effective you are dealing with private parties and that is why the French government is cherry of giving you a sovereign guarantee. If you are dealing with the French government and it is an inter-governmental agreement then why a letter of comfort, why not a sovereign guarantee on your advance payments."