AHMEDABAD: In a significant development in the Dahod MGNREGA scam investigation, police have arrested Kiran Khabad, the younger son of Gujarat Panchayat Raj Minister Bachu Khabad, further tightening the net around the influential Khabad family. This early morning arrest took place just hours after his elder brother, Balwant Khabad, was taken into custody on Saturday, signalling an intensifying crackdown. Kiran was apprehended on the Vadodara-Halol highway and swiftly brought to the police station.
Speaking to the media, Dahod DySP Jagdish Bhandari stated firmly, “Seven people have been arrested so far in connection with the MGNREGA scam. Some are in judicial custody, others on remand. Today, five more were arrested during a statewide operation.”
He added, “Among those arrested are Kiran Khabad, proprietor of the agency; APO Dilip Chauhan; former TDO R.K. Rathwa; and Parth Bariya, also linked to the agency. Bhavesh Rathod has also been detained. The investigation is intensifying.”
The massive Rs 71 crore MGNREGA scam has rocked Gujarat’s rural development machinery. With the arrest of Kiran Khabad son of the State Panchayat and Agriculture Minister the case has reached a new level. Kiran had been absconding, even as his elder brother Balwant Khabad, also a son of the minister, was arrested earlier on 17 May, directly linking both siblings to the high-profile fraud.
The scam, centred in Gujarat’s Dahod district, revealed deep-rooted corruption in the Dhanpur and Devgadh Baria talukas. Between 2021 and 2025, villages such as Kuva, Redhana, and Simamoi were falsely listed as sites of completed public works under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), while on the ground, little to no work had been done only forged reports and diverted payments.
As investigators delved deeper, they uncovered a sophisticated racket involving 35 material suppliers 28 from Devgadh Baria and seven from Dhanpur, who allegedly submitted fake claims in collusion with local officials. This nexus created a phantom infrastructure network, where roads, bunds, and other development projects existed solely on paper.
At the heart of the scandal was the systematic siphoning of funds meant for tribal employment, laundered through fabricated certificates and forged invoices. Authorities soon traced the money trail to firms linked to Minister Bachu Khabad’s sons Raj Construction and Raj Traders operated by Balwant and Kiran Khabad, both of whom had earlier sought anticipatory bail as the case closed in on them.
The fraud came to light after B.M. Patel, Director of the District Rural Development Agency (DRDA), flagged glaring discrepancies in project execution. A subsequent audit exposed missing records, fictitious worksites, and rampant document forgery. Senior bureaucrats are alleged to have turned a blind eye, allowing the scheme to proliferate across multiple layers of governance.
In response, the District Development Officer (DDO) halted all MGNREGA-related payments. Meanwhile, a Special Investigation Team (SIT) was constituted as the scale of the fraud widened. So far, fake bills amounting to Rs 60.90 crore in Devgadh Baria and Rs 10.10 crore in Dhanpur have been identified part of a larger Rs 160-crore scam still under investigation, with more talukas now coming under scrutiny.
