AHMEDABAD: A Rs 71-crore MGNREGA scam has rocked Gujarat’s rural development system, with the arrested accused including Balwant Khabad, son of State Panchayat and Agriculture Minister Bachu Khabad.
The scam, linked to massive irregularities in the Mahatma Gandhi National Rural Employment Guarantee Act scheme, has surfaced in Dahod district's Dhanpur and Devgadh Baria talukas.
Confirming the arrest, Dahod Dy SP Jagdish Bhandari told local media, “Balwant Khabad and then Taluka Development Officer (TDO) Darshan Patel have been arrested in connection with the MGNREGA scam in Dhanpur and Devgadh Baria. Further investigation is underway.”
Meanwhile, the minister’s younger son, Kiran Khabad, is absconding. Police said further investigation into the multi-crore fraud is ongoing.
At the centre of the scam is a well-organised network of fictitious infrastructure projects, roads, bunds, and other public works, that existed only on paper. Funds meant for tribal employment under MGNREGA were allegedly siphoned off through forged certificates and fake invoices, with the money reportedly diverted to agencies linked to the minister’s sons.
The scandal surfaced after B M Patel, Director of the District Rural Development Agency (DRDA), flagged major irregularities in project execution in Devgadh Baria and Dhanpur talukas. An audit that followed uncovered the fraud, tracing it to Raj Construction and Raj Traders, firms run by Balwant and Kiran Khabad, both of whom had sought anticipatory bail amid mounting evidence.
Between 2021 and 2025, villages like Kuva, Redhana, and Simamoi were falsely marked as beneficiaries of completed MGNREGA projects. On the ground, there was little to no work, only forged completion reports and a trail of diverted payments. As the investigation widened, authorities uncovered that 35 material suppliers, 28 from Devgadh Baria and seven from Dhanpur, were involved in routing fake claims with the help of complicit local officials.
Senior officers allegedly turned a blind eye, allowing the fraud to fester across multiple administrative levels. In response, the District Development Officer (DDO) froze all ongoing MGNREGA payments. Audits revealed missing logs, non-existent work sites, and widespread document forgery.
An estimated Rs 160 crore in fraudulent claims remain under scrutiny. A Special Investigation Team (SIT) has been formed to dig deeper. So far, Rs 60.90 crore in fake bills have been tracked in Devgadh Baria and Rs 10.10 crore in Dhanpur. Investigators believe these numbers are only the beginning, as more talukas come under the scanner.
Leader of Opposition Amit Chavda had earlier warned of the scandal in a letter to the Chief Minister, estimating the fraud at around Rs 250 crore.
Slamming the government’s silence, Chavda alleged that the Khabad-linked firms received unchecked payments for years. “This is daylight robbery of Gujarat’s poorest,” he said, demanding the minister’s resignation and a criminal probe at the state level.
Despite the mounting pressure, Minister Bachu Khabad has remained silent, and the ruling BJP has offered no official response, drawing sharp criticism from the opposition and civil society. What began as a routine audit has exploded into one of Gujarat’s biggest welfare scams, exposing entrenched corruption and leaving public confidence in government accountability in shambles.