STEPPING UP its crackdown, the Jharkhand government has suspended a key district welfare official in Dhanbad for not following due process and accepting applications without verification for the Centre’s pre-Matric scholarships for poor minority students.
This is the first punitive step taken by the state against any of its officials after it launched a probe into the illegal diversion of the scholarship, by a nexus of middlemen, school authorities, banking correspondents and government staff, based on the findings of an investigation by The Indian Express.
Separately, the Jharkhand State Co-operative Bank has frozen the accounts of two banking correspondents in Ranchi for their alleged involvement in the scam.
Last week, the state government issued an order placing Dhanbad District Welfare Officer Dayanand Dubey under suspension “with immediate effect for not following due process in conducting any inquiry resulting in illegal disbursement of the scholarship amount”.
The official’s name figures in an FIR registered in Dhanbad in November that accused a computer operator at the District Welfare Office of allegedly registering schools on the National Scholarship Portal (NSP) for the scholarship without Dubey’s signature.
Dhanbad is among the six districts in Jharkhand, apart from Ranchi, Latehar, Ramgarh, Lohardaga and Sahibganj, where The Indian Express found that the nexus colluded to dupe gullible parents and students, and set up fake beneficiaries, while genuine applicants were left out.
During its investigation, The Indian Express matched entries on the NSP with beneficiary bank accounts in the Public Finance Management System (PFMS) to find several cases of the scholarship being illegally diverted in Jharkhand and Bihar. It found that the scam also roped in schools from Punjab and Assam.
The initial findings of this newspaper’s ongoing investigation, published in a series of reports starting November, led to the registration of an FIR by the CBI in Bihar and separate FIRs across Dhanbad by the Jharkhand police against 103 people. No arrests have been made yet.
Subsequently, the Dhanbad administration found alleged irregularities and corruption in disbursal worth about Rs 10 crore involving a group of middlemen based in Chatra district.
In 2019-20, the Ministry of Minority Affairs disbursed Rs 61 crore under this scheme to Jharkhand. Under the scholarship, students from Class 1 to 5 receive Rs 1,000 per year, and students of Class 6 to 10 receive Rs 5,700 a year if they are day scholars or Rs 10,700 if they are in a hostel.
The Indian Express reported that in several cases, middlemen convinced school owners to provide their institution’s login ID and password on the NSP, or use a fake school letter pad to obtain them. Then, they involved banking correspondents to open accounts of prospective beneficiaries using their Aadhaar cards and fingerprints before applying for scholarships on their behalf.
This newspaper found that as soon as the scholarship is credited, the middlemen siphon off the money: they either strike a deal with the beneficiaries or schools, or the beneficiaries remain unaware and the money is split between the agents, banking correspondents, and school staff.
Following up on these reports, which identified banking correspondents Hashim Ansari and Rajab Ansari from Urguttu in Ranchi’s Kanke block, the Jharkhand State Co-operative Bank (JSCB) froze their accounts and sought explanations from them.
In their written response, the two denied any involvement, described the charges as “baseless” and submitted a list of schools along with students to whom they claimed to have disbursed the amounts.
However, these responses, which were accessed by the Indian Express, show a mismatch in their claims and data available on the NSP.
For instance, their responses include a note from the principal of Today’s English School in Ranchi that 45 students received the amount in his presence from the “bank workers”. However, the NSP data for 2019-20 show that scholarships were given to 213 students, including 186 hostelllers, from the school. The principal, Suresh Baitha, said money was given only to 45 students. “My school does not have a hostel,” he said.
Similarly, the responses include a note from the owner of Itki Carmel School in Ranchi that 35 students received the scholarship money in his presence. However, the NSP shows that 182 students received the scholarship, including 175 hostellers, from the school. School owner Sadique Hussain said: “Rajab Ansari approached me with the names of the students and asked me to sign. The amount was not mentioned then.”
JSCB CEO Prem Prakash said: “As soon as we received information of their alleged involvement, we froze their accounts. Their records are being scrutinised. We haven’t activated their accounts yet.”