Tuesday, Oct 04, 2022

Rs 935 crore misappropriated in NREGA schemes in last four years, show data from Govt

Only about Rs 12.5 crore of this amount — 1.34% — has been recovered so far, the data show.

With the success of this campaign, the officials say, only real beneficiaries will benefit from the government schemes apart from minimising the possibility of irregularities in panchayat funds.

Over the last four years, Social Audit Units (SAU) under Rural Development Departments (RDD) across India have found financial misappropriation of Rs 935 crore under various schemes of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), according to data obtained by The Indian Express through the Management Information System (MIS) of the Rural Development Ministry.

Only about Rs 12.5 crore of this amount — 1.34% — has been recovered so far, the data show.

Although the data is in the public domain, accessing it is difficult because of frequent “network issue”. The Indian Express accessed the data from FY 2017-18 to FY 2020-21 through a source in the government.

SAU audits have been carried out in 2.65 lakh Gram Panchayats (GPs) in the states and Union Territories of the country at least once over the last four years, since the data began to be uploaded in 2017-18.

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The Centre released Rs 55,659.93 crore for MGNREGA in 2017-18, and the amount has since risen every year to reach Rs 1,10,355.27 crore in 2020-21. Total expenditure on the scheme has risen from Rs 63,649.48 crore in 2017-18 to Rs 1,11,405.3 crore in 2020-21.

One of key findings of the audit is “financial misappropriation”, which includes bribery, and payments to non-existent persons and to vendors for material procured at high rates.

Social audits are seen as a powerful tool to enforce accountability. Union Rural Development Secretary Nagendra Nath Sinha emphasised this in a letter to all state chief secretaries recently, and asked why state RDDs have made only “little recoveries”.


“Yes, we have written to all the states… Lack of attention on this aspect is certainly one (of the issues). Another is the determination of culpability of the persons concerned for the irregularities — and in absence of SOPs to handle such cases such determination is not easy,” Sinha told The Indian Express when asked why recoveries have been low.

There were often not enough people to ensure payment of amounts shown as recoverable, Sinha said. “But ultimately it boils down to lack of attention and lack of sensitivity in taking social audit to its logical conclusion,” he added.

Indeed, no accountability was fixed for the misappropriation in many states. Consider:

  • Tamil Nadu accounted for the highest misappropriation of Rs 245 crore in 12,525 GPs across the state, for which 37,527 audit reports were uploaded. Recoveries stood at Rs 2.07 crore, only 0.85% of the misappropriated amount. One employee has been suspended and two have been dismissed, but not a single FIR has been filed.
  • Andhra Pradesh has 12,982 GPs, and 31,795 social audits were conducted and reports uploaded. Total misappropriated funds amounted to Rs 239.31 crore; recovery was Rs 4.48 crore (1.88%). Penalties of Rs 14.74 lakh were levied, and 10,454 employees were warned/censured. A total 551 employees have been suspended and 180 employees have been dismissed. Three FIRs have been filed.
  • Karnataka has seen misappropriation of Rs 173.6 crore in its 6,027 GPs; only Rs 1.48 crore (0.68 %) has been recovered. A total 22, 948 audit reports were submitted. Karnataka has registered no FIRs and suspended none of its employees, even though the services of two employees have been terminated.
  • In Bihar, Rs 12.34 crore was misappropriated; recoveries stood at Rs 1,593.
  • In West Bengal, Rs 2.45 crore was misappropriated; Rs 14,802 was recovered.
  • In Gujarat, only Rs 6,749 was misappropriated, nothing of which was recovered.
  • Jharkhand filed the most FIRs — 14 out of the 38 filed across the country over the last four years. Two employees were suspended, and the services of 31 were terminated. However, of the Rs 51.29 crore misappropriated, only Rs 1.39 crore (2.72%) has been recovered.
  • Rajasthan, Kerala, Arunachal Pradesh, Goa, Ladakh, Andaman and Nicobar, Lakshadweep, Puducherry, and Dadra and Nagar Haveli and Daman and Diu reported zero misappropriation.

Section 17 of the MGNREG Act mandates social audit of all works in gram panchayats. The Audit of Scheme Rules were notified in 2011, and The Auditing Standards for Social Audit in 2016. The Rural Development Ministry has released a Financial Management Index, in which social audit is a key parameter to judge the efficiency of states in management of finances. The 2011 Rules say the state government will facilitate the social audit of work done under MGNREGA in every GP once every six months.

Experts said the ‘real’ misappropriation could well be three or four times the identified amount, as in many GPs, audits have been done only once.

One of these experts who is based in Jharkhand, said: “Also, in 2020-21, the data uploaded are not significant, as in many states, including Jharkhand, concurrent audit was done and there is no provision to upload the data in the MIS of RDD. Combined with the fact that in many states GPs have been surveyed only once, the total misappropriated amount could be at least three to four times (the identified amount).”

A key requirement is for the SAU to be independent. Releasing the Social Audit Assessment Index report in June 2020, RDD Secretary Sinha had said: “…Disconcertingly, it has been noted that half of the SAUs are not independent and that the quality of audits and intensity of action on the findings needs to improve.”

First published on: 21-08-2021 at 03:02:28 am
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