Rs. 6000 Crore MNREGA Scam in Bihar

BeyondHeadlines News Desk

Bihar’s rural jobs scheme is marked by open loot, plunder and pillage and the scale and dimensions of the corruption suggest the active connivance of government officials, according to a performance audit by an NGO released here on Saturday.

Delhi-based Centre for Environment and Food Security (CEFS), which conducted a performance audit of the scheme under the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) in Bihar, said that 73% of the Rs 8,189 crore spent in 38 districts of the state during six years (2006-07 to 2011-12) have been embezzled by the implementing authorities. The amount siphoned off works out to nearly Rs 6,000 crore.

Today, Ram Vilas Paswan write a letter to Hon’ble Prime Minister of India to request to order the CBI inquiry in this case.

Here is the full text of letter from Ram Vilas Paswan to Prime Minister of India:


The Hon’ble Prime Minister

South Block

New Delhi

Sub :  Rs. 6000 Crore  MNREGA Scam in Bihar


A performance audit of the MNREGA conducted by CEFS suggests that about 73 per cent of the MNREGA funds spent in 38 districts of Bihar during 2006/7-2011/12 have been  embezzled by implementing authorities. Bihar spent a total amount of Rs. 8189 crore during 6 years (2006/7-2011/12) on NREGA. Since 73 per cent of NREGA funds have been siphoned off, a total amount of Rs. 5977 crore or nearly Rs. 6000 crore (73 per cent of Rs.8189 crore) has apparently been misappropriated by implementing authorities .

Delhi-based Centre for Environment and Food Security (CEFS) has conducted  a  performance audit of the  Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in Bihar  from 2006-2011 . The performance audit  has been conducted  through sample survey in 100  extremely deprived dalit villages spread over  10 districts of Bihar . The field survey for this audit was carried out  during January 2012  and a total of 2500 households ( 25 sample households per sample village) were interviewed for this purpose . Over 90 per cent  of the sample households covered under this survey  belong to dalit community  (majority of them Mahadalit – poorest of  Schedule Caste) . Almost all the sample households covered under this survey are  living definition of  extreme deprivation ; they are landless and   casual wage employment is their sole source of survival  . However, It is a tragic irony  that  in majority of these deprived villages , NREGA is  as good as non-existent for these most needy mahadlits/dalits but it has brought  windfall gains for the implementing authorities .

Misappropriation  in Wage Component of  NREGA  Fund        

The CEFS performance audit  suggests that about 73 per cent of the wage component of NREGA fund spent in Bihar during 6 years  (2006/7—2011/12) has been misappropriated by concerned authorities mainly through fake job entries in official records (muster rolls/ job cards)  and only about 27 per cent of the wages have reached bonafide and intended beneficiaries. Disaggregated proportion of wage embezzlement  in 10 sample districts  is  80 per cent in Purnia , 70 per cent in Katihar, 62 per cent in Begusarai , 71 per cent in Muzaffarpur, 82 per cent in Vaishali , 70 per cent in Nalanda ,79 per cent in Nawada , 63 per cent in Gaya ,85 per cent in Bhojpur and 68 per cent in Buxar district. The average  proportion of misappropriation in 10 sample districts comes to 73 per cent .

Modus Operandi of Embezzlement of NREGA Wages in Bihar    

NREGA wages in Bihar have been misappropriated mainly in three ways :

First ,  inflated / fake  job entries in the official records (muster rolls/job cards) of  genuine and  needy labour households  and the beneficiary not being aware about the same .

Second, fake job entries in the official records of  undeserving , prosperous and  non-labour households  and the beneficiary  allows the same for a commission of 5-10 percent of  the embezzled amount (commission job cards/ bogus beneficiaries).

Third,  through non-payment or only partial payment of the due wages to workers .

In this way , about 73 percent of the wage component of NREGA fund   has been siphoned off  by  implementing authorities in Bihar .    We have reasons to believe that all this is done  in  complicity with  Block authorities and in most cases the district authorities are also direct or indirect party to this loot .  Without complicity of Block and District authorities , open loot of  this magnitude is impossible .

 Misappropriation  in Material  Component

Any one who has even elementary knowledge  about the  functioning  of the MNREGA on the ground level  knows it very well that  percentage of  misappropriation  from the material component is  far too higher than the percentage of misappropriation  from  the wage component ;  because misappropriation from the material component is easier and less risky and   misappropriation from the wage component is  relatively difficult and  risky  due to  various Transparency and Accountability Provisions of the MNREGA .

In the case of Bihar  where 73 percent of wage component of NREGA fund has been misappropriated  by corrupt  and callous implementing authorities,  there  is no reason why the same authorities  would  siphon off lesser proportion  from the material component of NREGA fund ; because  embezzlement from material component is far too easier and relatively risk-free . In other words , we have no reason to believe that less than 73 percent of material component of NREGA fund has been siphoned off in Bihar .

Dismal State of NREGA  Employment

The  performance audit of MNREGA in Bihar suggests that over 35 percent of the extremely  poor, eligible and  most needy households in Bihar did not get  any wage employment whatsoever   during  6 years of its implementation ( 2006/7-2011/12). 17 percent of the extremely poor villages of Bihar  did not get any wage employment whatsoever during 6 years . Over 53 percent of the  most  eligible  households  whose sole source of survival is casual labour did not get even a single day of job during the previous one year ( January 2011-December 2011) .For  the entire  period of performance  audit (  2006-2011) ,  the actual average annual wage employment  provided per household is only about 5 days against the provision of at least 100 days of guaranteed wage employment under Section 3 (1) of MNREGA  .  It is  distressing  to note that this is the  ground reality of NREGA employment in the  extremely deprived  and most needy villages of Bihar .

It is important to mention here that the  sample survey was conceived , designed and conducted in such a way that  it would capture the ground reality of NREGA in entire Bihar  and its major findings ( actual average employment provided  , proportion of funds embezzled , major irregularities  in the implementation etc ) would be  extrapolated  for all 38 districts of the  State .

Transparency and Accountability

Very few villagers and labourers had seen muster rolls. Live muster rolls are never available at the worksites. Labourers are asked to sign on blank muster rolls .There is little transparency and accountability in the implementation of NREGA in Bihar. The mandatory Citizen Information Boards at the work sites  containing essential information about the concerned NREGA projects are almost non-existent in Bihar but they have universal presence in the vouchers and bills of every NREGA project , as we found in the online  NREGA MIS records . Similarly , no one has ever seen any CRECHE at any NREGA project site , but  they are universally present in the vouchers and bills of every NREGA project in Bihar .

Even after six years of the implementation of NREGA ,the Grievance Redressal Mechanism in Bihar  is confined to official papers and circulars only , hence,  as good as non-existent.Payment of unemployment allowance is unheard of  in Bihar .

Social Audit

In none of the surveyed villages there has been any Gram Sabha/Palli Sabha meeting for project selection or Social Audit of  NREGA work . At least, none of the villagers in these surveyed villages had ever attended any Gram Sabha meeting for project selection or participated in any social audit of the NREGA projects. We were told by the villagers and labourers in Bihar  that NREGA related Gram Sabhas and Social Audits were  conducted only in the official records and not on the ground.  If the social audits are conducted as per the Guidelines, there would be very little scope for corruption and serious irregularities.  The social audits in Bihar  have  no  meaningful participation of the villagers and beneficiaries ; and the reports of social audit are bogus or at best  perfunctory.

The Rural Employment Guarantee Scheme in Bihar has been virtually hijacked by implementing authorities. Survey findings have revealed that there is participatory loot, plunder and pillage in Bihar’s rural job scheme. There is open loot of taxpayers’ money, there is plunder of rural poor’s right to guaranteed wage employment for 100 days and there is pillage of every single norm of democratic governance and public  accountability.

CEFS has been doing research  and advocacy for effective and corruption –free implementation of the NREGA for last 6 years . In the process , CEFS conducted survey on the performance of NREGA in  Orissa ,MP and UP . CEFS surveys in these states revealed  widespread corruption , therefore , CEFS filed a PIL in the Hon’ble Supreme Court(SC) seeking directions for effective and corruption-free implementation of the Scheme in all states of India . The SC has ordered  CBI probe in Orissa on the basis of CEFS survey report .

I request you kindly to order the CBI inquiry in this case

With regards,

Yours sincerely,

(Ram Vilas Paswan)

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