Rural welfare scheme fraud under CBI lens

Pondy-based unregistered project implementing agency avails of `2.8 cr grant by creating fake sanction; Rural Development Ministry staff’s role suspected.

Published: 01st April 2013 08:07 AM  |   Last Updated: 01st April 2013 08:07 AM   |  A+A-

The CBI has begun investigations into an alleged case of fraud in the implementation of Aajeevika scheme of National Rural Livelihood Mission (NRLM) of the Ministry of Rural Development (MoRD).

Sreelajhna Educational and Training Foundation, an unregistered project implementing agency (PIA) from Puducherry, obtained a grant of Rs 2.8 crore under the special projects for placement-linked skill development of rural youth of the Ministry on August 7, 2012. The payment was made on August 13 to the PIA’s bank account with the Indian Overseas Bank at Puducherry, highly placed sources said.

Any PIA wishing to avail of the grant must be registered with the MoRD, a mandatory requirement for being a beneficiary. However, the foundation was not registered with the Ministry and yet managed to obtain the grant.

A total of Rs 2,81,25,000 was transferred from the Ministry’s bank account with the State Bank of Bikaner, New Delhi, to the PIA’s Indian Overseas Bank account in Puducherry on August 13. Interestingly, the amount was immediately transferred from the agency’s account to another branch in Chennai.

It was suspected that the foundation’s bank account in Puducherry was registered in the computerised system of the MoRD for availing of the financial benefits under the Aajeevika scheme in connivance with personnel from the MoRD. A fake sanction was generated through the system, following which the payment was made.

The fraud came to light during a weekly reconciliation of the pay and accounts division of the MoRD. When the payments made by the pay and accounts officer were reconciled, it was found that no records of the particular sanction were with the programme division of the MoRD. Subsequently, the CBI was roped in to inquire the matter.

Confirming the scam, Puducherry District Rural Development Agency (DRDA) project director A S P S Ravi Prakash said that they came to know about the irregularity after the joint secretary of the program division of the Ministry, Vijay Kumar, inquired about the PIA and sought details about it.

On inquiry, it was found that no such agency was registered with the Registrar of Cooperatives in Puducherry. “The  selection of PIAs for implementing the scheme is done directly by the RD Ministry after receiving applications and the DRDA is not kept in the loop,” he said. 

“Though the beneficiaries belong to states, the state-level DRDA office is not consulted while appointing the PIAs. Even the copy of the sanction order is not communicated to the DRDA and the State DRDAs remain in the dark,” he added.

Implementation of the special projects is generally entrusted with qualified PIAs in the private sector.

Those PIAs having capabilities in both training and placement of youth are selected by the MoRD through a transparent and objective appraisal process.

The projects are designed to equip unemployed rural youth from BPL households with skills that would enable them to either get placements in industries or pursue sustainable self-employment through micro enterprises.

Under the Scheme, rural BPL youth are provided training for a period of three months after which they are placed in the organised sector.

For implementation of the project, 75 per cent of the cost borne by the MoRD (programme division) in three instalments.

According to sources, the mode of selection of beneficiaries did not go down well with some state-level officers and they objected to it at a meeting convened by the Ministry.

“The matter is now being inquired by the CBI in Chennai,” said the source.


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