Govt finds 830 minority institutions on scholarship portal are fake

On July 10, the sources said, the Ministry handed over its findings to the CBI which is now carrying out its own probe.

Sources said these 830 fake or non-operational minority institutions were among 1,572 such institutions investigated by the NCAER across 21 states. However, they believe the number could be higher, saying there are around 1.8 lakh institutes across the country registered with the NSP for distribution of minority scholarships.

“The NCAER has submitted its report to the Ministry. It found that these 830 institutes — that is 53% of the institutes investigated — were either fake or non-operational,” the sources said.

Of these 830 institutions, the NCAER found 62 in Chhattisgarh to be non-operational, besides 99 in Rajasthan. “In Assam, 68% of the institutes investigated were found to be fake, 64% in Karnataka, 60% in Uttarakhand, 44% in Uttar Pradesh, 40% in Madhya Pradesh; and 39% in West Bengal were found to be either fake or non-operational,’’ sources said.

The minority scholarships were digitised and brought onto the NSP in 2016. According to sources, the Ministry has in the past five years released more than Rs 2,000 crore annually in funds under the minority scholarship schemes. The total amount between 2007-8 and 2021-22 was Rs 22,000 crores, they said.

The Indian Express had first reported the illegal siphoning off of the centrally funded pre-Matric scholarship scheme meant for poor students from the minority communities by an alleged nexus of middlemen, bank correspondents, officials and school staff in Jharkhand and Bihar in 2020. The Centre had subsequently (in November 2020) ordered a CBI probe into the irregularities.

Ministry sources said that during the 2020 investigation, the CBI had investigated five states – Jharkhand, Bihar, Punjab, Chhattisgarh and Assam, where several people were also arrested.

“There were 19 FIRs filed in Jharkhand and five in Bihar. No FIRs were filed for Punjab and Chhattisgarh. But even after the CBI investigation, on scrutiny of the National Scholarship Portal, certain discrepancies came to light,’’ the sources said.

During the recently concluded Monsoon Session, Minority Affairs Minister Smriti Irani had informed Parliament through written replies that her Ministry had begun the reverification of institutes and beneficiaries and assigned the task of “monitoring and evaluation of the Central Government minority scholarship scheme’” to NCAER. Irani took charge of the Ministry in July 2022. She could not be reached for comment.

Giving details of the irregularities, sources said that one of the most glaring discrepancies found was of fake institutes using codes registered with UDISE, a system which collects information of all recognised and unrecognised schools imparting formal education from pre-primary to Class XII.

“There are certain codes that are fed into the NSP by which the portal throws up red flags in three categories – low risk, medium risk and high risk. We asked NCAER to look into some of the high- risk red flags. The largest number of discrepancies were found in the pre-Matric scholarship schemes,” sources said.

They pointed to a “systemic institutionalised corruption involving institutes, the local administration and banks”.

“The process for applying for a minority scholarship is that the beneficiary applies on NSP. Every institute has an Institute Nodal Officer who verifies these beneficiaries and confirms they are genuine, and that the student studies in the institute. This in turn is verified by the District Minority Officer… This means that the siphoning of funds has been carried out at various levels and carries on despite the periodic transfer of the district minority officer.

“Moreover, each student also has to open a bank account for which a KYC is required. This entire process points to systemic institutionalised corruption involving institutes, the local administration and banks,’’ the sources said.

Citing instances, the sources said that it was found that there were 1.3 lakh applications for hostel scholarships in institutes without any hostels. There were also cases of male beneficiaries applying from girls’ schools.

“We received applications from a school in Rajasthan for Classes I-VIII, when the school only had classes from Classes IX-X. In Sitamarhi district in Bihar, 95% students who applied for scholarships were found to be fake – the applications had been submitted from a cyber café and the details of students at a nearby coaching institute had been taken. In Chhattisgarh, beneficiary applications were made from a tribal girl’s school where there were no minority students, and the details used were of students in Karnataka.”

In another instance, in 2018-19, 2,239 applications were found to have been submitted with the same phone number.

“What we have also found is a high drop out rate as soon as the scholarships are disbursed. Over 60% of the students dropped out from school after the disbursal of scholarships,’’ sources added.