Roads. Embankments. Medical colleges. Government buildings. These are among the projects to which the Bihar government, in 2018-19, diverted more than Rs 8,800 crore by dipping into a fund meant exclusively for an SC/ST scholarship — which it has cited a shortage of money for and denied to many eligible students for around six years.
This diversion of the Scheduled Caste Sub Plan (SCSP) fund was flagged by the Comptroller and Auditor General (CAG) in its 2018-19 report on Bihar’s finances, The Indian Express has learnt. It took place despite provisions of the Planning Commission (now the NITI Aayog) stating that the SCSP fund is meant for extending the centrally-sponsored Post-Matric Scholarship (PMS) to SC/ST students with an annual family income of less than Rs 2.5 lakh.
The Indian Express had reported on August 10 (‘Bihar denies SC/ST scholarship for 3 years, says technical issues with portal’) that the Bihar government had kept PMS on ice since 2018-19 citing a “technical snag” with the national application portal. In fact, most Bihar SC/ST students had been denied this scholarship for six years — in 2016, the Bihar government’s SC/ST welfare department imposed a fee cap under it, increasing the financial burden on students.
The scholarship — 60 per cent of which is funded by the Union Social Justice and Empowerment Ministry — is meant for educational and professional courses above Class 10 till Masters level.
According to the CAG report on the use of the scholarship funds:
– The state diverted Rs 2,076.99 crore to the state electricity department and also loaned it Rs 460.84 crore.
– It diverted Rs 3,081.34 crore for major road projects.
– Rs 1,202.23 crore went into constructing embankment and flood control projects.
– Rs 1,222.94 crore was used for for medical colleges
– It utilised Rs 776.06 crore for constructing an agricultural department office and other buildings.
The 2018-19 CAG report — whose observations have been accepted by the government — says: “The Committee observes from the findings of the CAG that funds earmarked for development for SCs and STs have been diverted for other purposes. The Committee takes a serious view of the matter and recommends that NITI Ayog should ensure that funds earmarked for respective development schemes for SCs/STs must not be diverted for other purposes under any circumstances,” The Indian Express has learnt.
But in its reply to the CAG, the state Finance Department, in fact, agreed that diversion of funds from SC/ST heads is barred. “Consequent upon the allocation of monitoring AWSC [Allocation for Welfare of Scheduled Castes] to the department of Social Justice and Empowerment, regular meetings are held with all the ministries/departments concerned for checking all types of irregularities in expenditure of AWSC…. the financial progress made by the ministries/departments are made is done on real time basis. The ministry of finance (on 23 August, 2016) has clearly stated that re-appropriation of funds from SC/ST heads to other heads is barred,” it stated.
And the government doubled down on this position on SC/ST funds when Bihar Finance Minister Tarkishore Prasad stated in the 2021-22 state Budget highlights: “Fund for SCs/STs are allocated under separate sub-heads and it cannot be used for any other purposes.”
Bihar Additional Chief Secretary, Education, Sanjay Kumar, said the Finance Department was the competent authority to comment on the funds diversion.Finance Department officials contacted by The Indian Express declined to comment on the matter, stating that the department has already replied to the CAG.
Meanwhile, the state government has again started inviting applications under the scholarship scheme, said Kumar.
In a reply to a PIL in the Patna High Court on the scholarship issue, the government said a fund crunch was one of the reasons behind the scholarship being put on hold.
The High Court has now asked the state government to reply to a counter-affidavit by the petitioner’s lawyer asking how the state diverted the SCSP fund while citing a fund crunch.
Alka Verma, the lawyer of the petitioner, Samastipur resident Rajiv Kumar, told The Indian Express: “After what the 2018-19 CAG report said, nothing much is needed to say on how the sacrosanct fund was diverted. It is also surprising how the Bihar government cites fund crunch for a scheme in which Centre can give unlimited funds to a state above the state’s committed liability. Under previous guidelines, it used to be a 75:25 Centre-state share. Under fresh guidelines, it is a 60:40 centre-state share.”
Spending below limits
The flagship post-matric scholarship benefits around 60 lakh SC/ ST students annually in the country. Bihar alone has about five lakh eligible students every year. The scheme has been doing well in other states, including in neighbouring Uttar Pradesh. Under the scheme, a state is entitled to avail any amount from the Centre above its annual committed liability of about Rs 115 crore. Bihar barely spent around Rs 60 crore annually between 2017-18 and 2019-20. Since it spent much less than its committed state liability, Bihar did not qualify for any Central share in this period.