DisFact #2: Rafale deal; manual scavenging; J&J faulty hip implants

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Rafale deal: Former French President’s comment creates controversy

There were two major developments in the Rafale saga this week.

If you have not been following the story, read this explainer to get on track. If you prefer video, watch this.

Quick notes relevant to this week’s developments:

  1. What’s Rafale? In April 2015, PM Modi had announced that India will buy 36 Rafale fighter jets, manufactured by Dassault Aviation, a French aircraft builder and integrator. The deal was signed in September 2016.

  2. Cost: Rs. 59,000 crore

  3. Plan change: The negotiations started during the Congress-run UPA regime. Modi’s decision replaced the previous plan. UPA had decided to buy 126 Rafale aircrafts, 108 of which were to be made in India by Hindustan Aeronautics Limited (HAL), an Indian state-owned aerospace and defence company, using parts imported from France.

  4. Investment in India: “According to the ‘offset clause’ of the contract, Dassault Aviation must select an Indian partner from which it must source 50 per cent of the value of the contract (around Rs 30,000 crore), in order to boost local manufacturing.” (NDTV)

  5. Reliance angle: The bulk of the Rs 30,000 crore that has to be invested in the Indian ecosystem will be channelled through Dassault Reliance Aerospace, a joint venture established between Anil Ambani’s Reliance Aerostructure and Dassault.

  6. The key controversy: Congress President Rahul Gandhi has alleged that (a) India is overpaying for the Rafale aircraft (b) it is doing so to benefit businessman Anil Ambani.

  7. Important note: “Reliance Defence will not be making any Rafale aircraft for the Indian Air Force. The company’s response to these allegations has been to point out that they are only responsible for offset obligation contracts, and so are not comparable to HAL.” (Scroll)

What happened this week

Issue #1: Former chief of Hindustan Aeronautics Limited (HAL), told the Hindustan Times that Rafale fighter aircrafts could have been developed in India. This is the first time anyone from the state-owned aircraft maker has publicly commented on the questions around the deal.

State-run plane maker Hindustan Aeronautics Limited (HAL) could have built Rafale fighters in India had the government managed to close the original negotiations with Dassault and had actually signed a work-share contract with the French company, said T Suvarna Raju, who was heading HAL till three weeks ago. He questioned why the Union government was not putting out the files in public.

Reactions: (see thread)

Anand Ranganathan@ARanganathan72

On the former HAL Chief T Raju's remark, that HAL could have built Rafale jets - yes, what he says should be taken seriously.

But what he DOESN'T say should be taken seriously as well, that EVEN DURING the UPA tenure, Dassault DID NOT want to partner HAL. https://t.co/qJzuzYbnX5 pic.twitter.com/mc36PNqZEe

September 20, 2018
Issue #2: (This is a big deal) In an interview to a French publication, former French President François Hollande said that it was the Indian government that had proposed the name of Ambani’s Reliance Defence for the Rafale pact, which was agreed upon when he was president. (Indian Express)

Why it is significant:

The former French President’s remarks contradict the Indian government’s claim that the deal between Dassault and Reliance was a commercial pact between two private parties and the government had nothing to do with it. (Indian Express)

Responses (at the time of sending the newsletter)

1. Indian government: report is being verified.

Defence Spokesperson@SpokespersonMoD

The report referring to fmr French president Mr. Hollande's statement that GOI insisted upon a particular firm as offset partner for the Dassault Aviation in Rafale is being verified.
It is reiterated that neither GoI nor French Govt had any say in the commercial decision.

September 21, 2018
2. Dassault Aviation: “It was Dassault Aviation’s choice to partner with the Reliance group.” (Hindustan Times)

3. French government: “The French government is in no manner involved in the choice of Indian industrial partners who have been, are being, or will be selected by French companies.” (Hindustan Times)

4. Reliance Defence: No comment as of Saturday morning.


Manual scavenging, a national shame

“It’s illegal, it’s demeaning and it’s fatal. And yet, it happens.”

What: At least eleven Indians have died in September while cleaning sewers or septic tanks without adequate safety gear. In theory, manual scavenging was banned 25 years ago.

What is manual scavenging?

Manual scavenging is described by the Prohibition of Employment as Manual Scavengers and their Rehabilitation Act, 2013 as “manually cleaning, carrying, disposing of, or otherwise handling in any manner, human excreta from the insanitary latrines”. (Down To Earth)

Numbers: Since 2017, one person died every five days cleaning sewers and septic tanks in India since 2017. Officials say “even this number could be a gross under-estimation, considering the lack of data.” (Indian Express)

Why you should care: The law is not being enforced. There is no fear of penalties.

But in spite of a well-funded programme such as the Swachh Bharat Abhiyan in operation, little attention is devoted to this aspect of sanitation. The requirements of worker safety and provision of safety gear for rare instances when human intervention is unavoidable are often ignored. Mere assertions by the Centre that it is pressing State governments to prosecute violators, therefore, ring hollow. More and more incidents are being reported of workers dying in septic tanks. In the absence of political will and social pressure, more lives could be lost because more tanks are being built in rural and urban areas as part of the drive to construct toilets. (The Hindu editorial)

Go deep:

  1. Manual scavenging: A stinking legacy of suffocation and stigma (Down to Earth)

  2. 'I'm born to do this': Condemned by caste, India's sewer cleaners risk death daily (The Guardian)


Johnson and Johnson’s faulty hip implants

This is a must read: How Johnson and Johnson is scooting from the hip.

I missed this Mint expose from August. It is outrageous. It is a story of the lack of accountability in the Indian healthcare sector. Worth reading the full story.

What: In August 2010, Johnson & Johnson’s (J&J) faulty hip implants were recalled globally as “it left large quantities of metal debris in the body and it had a very high failure rate”. 4,500 patients in India were implanted with the faulty hip joint. But neither the company nor the regulators systematically reached out to patients to inform them of the faulty implant. The victims continued to suffer.

This is not fair: The company has paid $2.5-billion in compensation in the US. Not so in India (yet).

The question is when will the patients get their due? Malini Aisola, co-convenor, All India Drugs Action Network (AIDAN), blames it on faulty products, lax compensation rules and believes that government’s action is long overdue. “There is a deeply flawed system in place that depends on companies to self-report adverse events with their devices. Not only is there a failure to hold companies accountability for unsafe, faulty products but the utterly lax oversight can even enable purposeful negligence amounting to criminal behaviour in following up with patients.”

Things are moving: This week, following media reports, the company has initiated the process to identify affected patients. According to Mint, J&J has reached out to surgeons and hospitals to ensure that patients register on their helpline numbers and take advantage of the reimbursement programme.

Read more: Out of joint: Documenting the repercussions from Johnson & Johnson's faulty hip implants (The Hindu)


If you are nerdy about India’s power sector..

This week, the Hindustan Times ran a five-part op-ed series featuring analysis from the recently-released book, Mapping Power: The Political Economy of Electricity in India's States.

The Indian economy is among the fastest growing in the world. Sustaining this growth requires a healthy electricity sector, ideally alongside an eye to environmental sustainability. Yet, consumers continue to face unreliable supply, distribution utilities are in poor financial health, and power plants remain under-utilised.

The first part sets the context: Reform in the electricity sector is all about getting the politics right.

..mapping power requires exploring politics beyond the power sector alone, including party politics, the politics of regionalism within states, and patterns of economic development. While national-level politics and technology drivers are also important, the starting point must be dynamics that are state-specific.

Other articles in the series: state-wise case studies

  1. How to reform Uttar Pradesh’s troubled power sector

  2. Consumers upfront in tale of two reforms in Andhra Pradesh

  3. West Bengal: Taking two steps forward, one step back

  4. Karnataka’s power sector: History, politics of development have consequences


Other reads

  1. IL&FS saga: A large infrastructure finance company is in trouble

  2. Bizarre things: Defence analyst arrested by Odisha Police days after he jokes about Konark temple. Basically, free expression is a real joke in India.(Scroll)

  3. Twitter thread: how the government spins job numbers.

    Somesh Jha@someshjha7

    Thread: Don't fall into the trap of various reports claiming job creation rose to an 11-month high in July. The government changed the way of computing payroll estimates. Going by its older formula, payroll numbers in July declined compared to June.https://t.co/V1qmSXsn3q

    September 21, 2018
  4. More Twitter: Key highlights from a new working paper on Intergenerational Mobility in India.

    Paul Novosad@paulnovosad

    🚨 New working paper 🚨 on Intergenerational Mobility in India. Biggest takeaway in 1 graph: Upward mobility for Muslims way behind forward castes, SCs and STs, and going down. Thread, with @thesamasher and @charlesrafkin. 1/11 pic.twitter.com/TWJkVvWdNe

    September 19, 2018
  5. The new corruption: In this Indian Express op-ed, Christophe Jaffrelot describes the two dimensions of crony capitalism and how businessmen-turned-MPs — their % is increasing in the Lok Sabha—leads to a conflict of interest.

    L‘Affaire Mallya is revealing of the different facets of the Indian version of crony capitalism. First, cronies have no political party; to be more precise, they shift allegiance from one party to another. Vijay Mallya became a Rajya Sabha member in the early 2000s with the support of Congress. He then joined Subramanian Swamy’s party and was finally re-elected to the upper house with the help of the BJP and the JD(S). Second, his political trajectory shows that parties need capitalists, according to a mechanism described by Raghuram Rajan in a remarkable paper, “Is there a threat of oligarchy in India?”.

  6. Pradhan Mantri Jan Arogya Yojana or Ayushman Bharat — Modi government’s flagship health insurance scheme—launches tomorrow. In Mint, NIPFP professor Sudipto Mundle writes about the promises and challenges of this bold experiment.

  7. Why Bank of Baroda, Vijaya Bank and Dena Bank are being merged (Indian Express)

  8. Interesting new paper on the political economy of data localisation.


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