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Mainstream, VOL L, No 20, May 5, 2012

V.P. Singh and Bofors

Sunday 13 May 2012


[(With the Swedish ‘Deep Throat’, who brought out the Bofors kickbacks issue through his exchange of valuable information with investigative journalist Chitra Subramaniam-Duella, having decided to identify himself 25 years after the scandal emerged in press reports (he is none other than former Swedish Police head Sten Lindstrom), Bofors has resurfaced in the public domain. In this context we are reproducing what an elder statesman, C. Subramaniam, who held both Finance and Defence portfolios in the Union Government in the past, stated on one aspect of the subject in the wake of then PM Rajiv Gandhi’s Ministers’ vitriolic attack on V.P. Singh as being responsible for the Bofors deal. He was never a confirmed opponent of the Rajiv dispensation. The piece appeared in Mainstream (August 5, 1989). —Editor )]


Replying to the debate in the Rajya Sabha on the CAG report on the Bofors deal, the Defence Minister, K.C. Pant, advised the Opposition not to use the CAG’s shoulders to rest their guns on. I wish he had given similar advice to his own partymen not to in turn rest their guns on V.P. Singh’s shoulders while adopting a “holier-than-thou” attitude!

The issues arising from the CAG report and also from whatever is public knowledge about the controversial transaction, including the nume-rous documents of undisputed authenticity pub-lished in reputed newspapers like The Hindu and The Statesman, are too serious to be limited to an exercise of scoring debating points against one another.

To put it bluntly, any loss of reputation of the Indian Government which is a model for the Third World in agricultural, industrial and social welfare programmes, diminishes every Indian. It is in this consequence, a loss of moral leadership, that is perturbing in the frantic moves to shy away from or sidetrack the main issues and make a scapegoat of V.P. Singh and the Finance Ministry.

Let me at the very outset make it clear that I hold no brief for Singh (who can very well take care of himself), nor am I out to indict Rajiv Gandhi.

Having had the unique advantage of func-tioning as a Cabinet Minister in the Indian Government in a variety of Ministries, including those of Finance and Defence, and of handling major proposals from both sides of the table, as it were, I do not know whether I should be amused or aghast at the way in which some members of the ruling party are seeking to confuse the public by mis-representing the role of the Finance Minister and Finance Ministry in disposing of proposals of this nature.

First of all, the Finance Ministry, like any other, functions within the parameters set by the rules framed under Article 77(3) of the Constitution. It is no part of that Ministry’s conduct of business to take upon itself the duties and responsibilities properly falling within the purview of an audit department, nor is the Finance Minister a surrogate Auditor General.

The Ministry is not supposed to be going into every proposal with a toothcomb as if it is originating it: For one thing, it is not equipped personnel-wise or expertise-wise to do this. Also it does not simply have the time for such an exercise either. For another, duplicating the work of the administrative Ministry is bound to blur the lines of responsibility and accountability, even if it does not detract from the spirit of trust that ought to permeate the working of the Ministries.

The Finance Ministry, therefore, has necessarily to assume that the proposal being forwarded to it has been scrutinised with thoroughness and from all angles and at all concerned levels of the administrative Ministry with particular reference to the need, justification, compliance with all administrative, professional and technical specifications and observance of all procedural requirements.

The Finance Ministry on its part satisfies itself about the tenability of the proposal, its confor-mity with the budget provisions, rules and proce-dures governing the transaction and the reasona-bleness of the expenditure to be incurred when juxtaposed with the intrinsic nature of the case.

LET me explain with reference to the Bofors deal itself how such a proposal must have been dealt with as per the system that I had known and that I believe still exists. The purchase of howitzers for the Indian Army of such sophistication and on such a scale and with so many rival claims, and so intimately connected with national security and defence, is undoubtedly a matter of the utmost gravity and great moment.

It is, therefore, first and foremost the responsibility of the Army Headquarters, headed by the Chief of Army Staff, to initiate it providing full justification for the purchase and to get the approval of the Defence Ministry, in principle, to proceed with formalities like floating tenders, processing quotations, carrying out field trials, etc. Normally, even prior to inviting tenders, the General Staff Qualitative Requirement (GSQR), listing out in full the complete technical and operational specifications that the weapons system should fulfil, is expected to be formulated and approved by the Army Chief and once his approval is secured, any subsequent modification or variation in the terms and specifications should seldom, if ever, be permitted.

In the case of Bofors, apparently a GSQR did exist, although in a draft form and it was on that basis that the four systems were evaluated by the committee under Lt. Gen. Mayadas, the then Director-General of Weapons and Equipment, whose order of preference reportedly gave first place to the Austrian gun with the Swedish Bofors ranked third.

A firm GSQR seems to have been obtained in due course from the Director-General, Artillery; but at the Army Headquarters itself, the French gun followed by the Swedish Bofors were ranked ahead of the Austrian and the British gun. Whe-ther this was due to any variations made in the GSQR ex post facto or whether a new basis for fresh evaluation was adopted independent of the GSQR is not clear. Whatever it be, on six separate occasions the Army Headquarters plumped consistently for the French Sofma, but for reasons explained by the Army Chief before the JPC, he took the responsibility on himself to swerve from the previous stand and recommend the Bofors gun to the Ministry.

I do not want to read more into the change of stance of the Army Chief except to say that he had every right to change his mind, if he, in all honesty, felt that the objective facts and compulsions of the security environment warranted the change. All that I wish to emphasise is that from the Finance Minister’s standpoint, the case in favour of the Bofors gun had been given the full treatment within the one and only forum, namely, the AHQ, competent to give it.

Once the file came to him with the administrative endorsement of the Defence Ministry—presumably under the signature of the Defence (Prime) Minister himself in view of the amount involved and the zigzag course it had run in the matter of inter-se ranking—it was not for the Finance Minister to begin reading between the lines and allow himself to be swayed by distrust and suspicion.

He did the right thing by concurring in the proposal from the point of view of outgo of funds, leaving the technical and professional part of the scrutiny to the AHQ and the Defence Ministry where it belonged.

I do not know whether the ruling party members realise that, by accusing V.P. Singh of constructive responsibility for whatever is contained in the CAG report, they also give the impression of admitting wrongdoing by a person or persons unknown! In any case, as I have tried to point out, no such responsibility can devolve on the Finance Minister in the way the system and procedures operate. Of course, it is possible that something happened behind the back of the Finance Minister but then how can he be blamed for not setting right what he did not know was wrong?

This brings me to my final point which is not whether the AHQ and the Defence Ministry were right or wrong about the Bofors gun nor whether V.P. Singh should or should not have concurred in the proposal, but that, once the Swedish Radio, the Swedish press and the Swedish Public Prosecutor, supplemented by documents published in the press here, raised suspicions about shady deals and shadowy figures, some of whom were evidently Indian middlemen, Rajiv Gandhi should have launched a full-scale investigation in a convincing and credible fashion. The aim of such investigation would be to bring the culprits to book without loss of time.
Instead, it is a great pity that he confounded the suspicion by his shifting and contradictory stands and evasive tactics resulting in his putting himself into a tight corner. If there is a widespread feeling that he has something to hide or somebody to shield and if L’affaire Bofors has assumed larger-than-life proportions, Rajiv Gandhi unfortunately has to bear the lion’s share of the blame, which has been enhanced by his ebullient defenders inside and outside Parliament.

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