The Central Bureau of Investigation (CBI) Monday registered a First Information Report (FIR) into a minority scholarship 'scam', in which 830 “fake” institutions received benefits, causing a loss of more than Rs 144 crore to the Ministry of Minority Affairs between 2017-18 and 2021-22 financial years. The FIR is against “unknown nodal officers, officials or public servants of public public sector banks, private persons”. The FIR mentions that its genesis lies in the “reports published in the The Indian Express”, based on which the Minority Affairs ministry first ordered a Preliminary Enquiry by the CBI, and later engaged the National Council of Applied Economic Research (NCAER). The NCAER carried out third-party evaluation of the scholarship schemes in 1,572 institutes, and found that 830 of them were ‘fake or partially fake’. It also pegged the losses to the exchequer at Rs 144 crore. In a letter to the CBI on July 10 this year asking for a ‘thorough investigation’, the ministry's Secretary, Indevar Pandey, wrote about the loss. He also mentioned that the ministry had given scholarships to students from more than 1.80 lakh institutions. Pandey wrote: “(it) indicates that the level of loss to the government is likely to be much higher. This would not have been possible without the collusion of institutions, applicants, institute/district Nodal Officers as the amount is directly credited to the bank account of the beneficiaries.” CBI’s PK Srivastava is the Investigating Officer of the case. What is the scholarship scheme? The Ministry of Minority Affairs runs three scholarship schemes: pre-matric scholarships, post matric scholarships, and merit-cum-means for the students of six minority communities, including Muslims, Christian, Sikhs, Jains, Buddhists and Parsis. In the last 5 years ending 2021-22, on an average, 65 lakh students received scholarships every year. The funds are made available to students directly in DBT mode. What is the scholarship scam as reported by The Indian Express? The Indian Express investigated the Pre-Matric Scholarship Scheme, which is meant to help minority students of families with annual income below Rs 1 lakh. The scholarship is given in two tiers every year: students in Class 1 to 5 receive Rs 1,000 per year and students of Class 6 to 10 receive Rs 10,700 if a hosteller or Rs 5,700 if a day scholar. In an investigative series spanning more than a month, The Indian Express in November 2020 — starting from Jharkhand — reported that a nexus of brokers, bank correspondents, school staff and state government employees allegedly colluded to dupe students and their families of the scholarship. The Indian Express also cross-checked data on the National Scholarship Portal (NSP) with beneficiary bank accounts recorded in the Public Finance Management System (PFMS) to find how a direct benefit transfer scheme, meant to cut corruption, was being derailed by it. The investigation revealed multiple instances of fraud and corruption across Jharkhand, Bihar and other states in the distribution of the scholarship amount. How did the government react? Multiple FIRs were registered in Jharkhand, Bihar, Assam, and other places. It was after these reports that the Minority Affairs ministry referred the matter to the CBI for a Preliminary Enquiry, the report of which is yet to be submitted. At a later stage, the NCAER was asked to carry out its investigation, which arrived at the figure of a loss of Rs 144.33 crore to the exchequer in the period 2017-18 to 2021-22. As per the FIR, the loss could be calculated only for the period for which the ministry had “clean digitised data on NSP”. The applicants from these institutions might have availed scholarships for the years prior to 2017-18 too. What were the findings of NCAER? As per the CBI FIR, the NCAER report, as part of its annexure, said that the verification of beneficiaries was compromised at the level of Institute Nodal Officer (INO) or District Nodal Officer (DNO), and the scholarship was siphoned off by them in collusion and connivance with the institutes, banks and cyber café owners. The most common irregularities found included: Some institutions with enlisted beneficiaries were found to be completely non-operational, but availing the benefits of the scheme. The enlisted beneficiaries were found 'fake' in some operational schools. Fake students were registered in institutes outside the states concerned, but were verified by the domicile state district nodal officers. Those institutes which had UDISE details (a unique number for each school), but were not on NSP were targeted and fake INOs were created on the NSP. For submitted applications, verification and revalidation were done by colluding with District Nodal Officers who didn't conduct physical verification. In Bihar, it was noted that the registered INO in the government's list were cyber café owners, who “probably made fake applications for coaching center students." Some schools in Madhya Pradesh reported that they were not recognised after Class 7, but a large number of registrations were for students of Class 8 and beyond.
