CPM alleges Modi govt misused public funds in Rafale deal so that 'crony gets massive tax breaks'

The CPI(M) on Saturday alleged that the Modi government misused public funds to pay an "exorbitant" price for Rafale fighter jets to benefit "crony businessman" Anil Ambani through offset deal and French tax benefit.

The party was reacting to a report in French newspaper Le Monde claiming that france waived tax for the French subsidiary of Anil Ambani's Reliance Communications in 2015, months after India's announcement of buying 36 Rafale jets.

"So, our public money is used by Modi govt to pay exorbitantly more for far fewer Rafale fighters than required, to benefit a crony businessman through the defence deal and French tax benefit. No wonder BJP introduced secret Electoral Bonds for party funding, legalising corruption," CPI(M) general secretary Sitaram Yechury said.

"The whole nexus is now coming out into the open. PMO was directly involved in Rafale scam bypassing our Air Force, and NSA was illegally negotiating in Paris. As former French President said, Modi asked for Anil Ambani as a partner for the deal. And now this - French tax waivers," he tweeted.

The French newspaper said France tax authorities accepted 7.3 million euros from Reliance Flag Atlantic France as a settlement as against original demand of 151 million euros. Reliance Flag owns a terrestrial cable network and other telecom infrastructure in France.

Modi had announced the procurement of a batch of 36 Rafale jets after talks with the then French President Francois Hollande on April 10, 2015 in Paris. The final deal was sealed on September 23, 2016.

In its reaction, Reliance Communications rejected any wrongdoing and said the tax dispute was settle under legal framework which is available for all companies operating in France.

Yechury said, "Modi goes to France, compromises national security by signing on fewer aircraft, gives deal to crony Ambani, HAL is kept out. So the public pays 41per cent higher amount for fewer aircraft and crony also gets massive tax breaks. Modi formula of helping his rich friends," he said.