Minority Scholarship Scam: Union Ministry Reports Rs 144 Crore Loss From Exchequer, Swindled By 830 Fake Institutions; CBI Files Case

The Ministry of Minority Affairs has reported an alleged minority scholarship scam to the Central Bureau of Investigation (CBI).

The CBI has registered a first-information report (FIR) regarding the matter, which involves 830 institutions receiving benefits under the scheme.

These institutions, categorised as "fake," have caused a loss of over Rs 144 crore to the Ministry between the financial years 2017-18 and 2021-22.

The FIR, based on the Ministry's allegations, focuses on institutes registered with the National Scholarship Portal (NSP). These institutes have been identified as either non-operational, fake, or partially fake.

Among the 830 institutes involved, more than 700 cases of alleged fraud have been detected in five specific states, namely: Assam, with 225 such institutes, Karnataka with 162, Uttar Pradesh with 154, Rajasthan with 99, and Chhattisgarh with 62.

The complaint highlights that the estimated loss to the exchequer due to scholarships provided to these 830 institutes between 2017-18 and 2021-22 amounts to Rs 144.33 crore, as informed by the agency.

A case was filed on 28 August against unidentified officials of certain institutes, unidentified officials/public servants of PSU banks, unidentified individuals, and district and state nodal officers.

The individuals were charged under various sections of the Indian Penal Code, including criminal conspiracy, cheating, forgery, and using forged documents or electronic records.

The FIR was based on a written complaint received on 10 July from Indevar Pandey, secretary of the Ministry of Minority Affairs, as stated by the CBI.

In his complaint, Pandey mentioned that the Ministry provides scholarships for students belonging to six minority communities, namely Muslims, Christians, Sikhs, Jains, Buddhists, and Parsis. These scholarships include pre-matric scholarships, post-matric scholarships, and merit-cum-means scholarships.

The complainant stated that due to reports of funds embezzlement under the scholarship schemes, the Ministry enlisted the National Council of Applied Economic Research (NCAER) to conduct a third-party evaluation of the schemes.

Additionally, the Ministry conducted an evaluation through the NSP, which flagged suspicious institutions and applicants.

A complaint has highlighted that 1,572 institutes from 21 states were flagged for evaluation on NSP. Out of these, 830 were found to be non-operational, fake, or partially fake.

According to the complaint, the calculation of losses can only be done for the period for which the Ministry has clean digitised data on NSP. However, it is possible that applicants from these institutions have also received scholarships in previous years before 2017-18.

The complaint points out that the Ministry has granted scholarships to students from over 1.80 lakh institutions, indicating that the actual loss to the government is likely to be much higher.

This suggests the involvement of institutions, applicants, institute nodal officers, district nodal officers, and bank officials, as the scholarship amount is directly credited to beneficiary bank accounts.

To address this issue, a comprehensive investigation is necessary to identify all institutions involved and students/applicants who have fraudulently claimed scholarships.

This step is crucial in ensuring accountability and preventing further misuse of scholarship funds.

The NCAER team has identified several irregularities in the implementation of the scheme in 350 sample schools and institutions, as well as among the beneficiaries.

Pandey has alleged that the most notable irregularity is the discovery of non-operational institutions that are still benefiting from the scheme. Additionally, there have been instances of fake beneficiaries being listed in operational schools.