Concerned over reports of alleged financial misappropriation by minority-run institutions across the country, the government is reportedly now in the process of nipping this fraud in the bud.
It has come to light that out of 1572 such institutions, spread across 21 states and the Union Territory of J&K, a staggering 830 have fraudulently claimed Rs.144 crores in fake scholarships between 2018 and 2023.
The Ministry of Minority Affairs is said to confirmed this alarming scam to a television channel over the weekend and said that it is probing the matter on a priority basis.
The alleged siphoning of funds in the name of granting pre-matric scholarships by the ministry, unnamed sources revealed is a practice that has been going on for decades. They further revealed that the scam came to light in 2016 when the ministry started the digitisation of records.
As of now, the ambit of the probe encompasses over eight crore scholarships in 21 states, with 80 percent of them linked to Muslim groups. At present, fake madrasas, tribal schools and officials are under investigation, they said.
The recent report also highlights the existence of 40 crore fraudulent bank accounts with completed KYC formalities.
Investigations revealed that for Fiscal 2018-2019, a single mobile number was associated with all 2239 scholarships, and in between 2019 and 2020, a total of 577 scholarships were linked to a single mobile number.
Theese findings have come years after the Minority Affairs Ministry launched an inquiry into the allocation of pre-matric scholarships in Jharkhand, prompted by concerns over a potential diversion of funds by a network involving intermediaries, bank officials, school personnel and state employees.
In 2020, Jharkhand Chief Minister Hemant Soren announced plans to start an investigation into the alleged scam.
As per reports, minority students from Jharkhand have fallen victim to a scheme where a collaboration between bank personnel, intermediaries, school officials and government employees has led to them being deceived of a central government scholarship.
The scheme involving the provision of scholarships to students ranging from Class 1 to the PhD level, encompassing both pre-metric and post-metric stages, commenced with the establishment of the National Minority Commission in 2007-2008. Since its inception, approximately eight crore of these scholarships have been disbursed.
For the academic year 2022-2023, there are nearly 26 lakh verified and approved applicants for this scholarship. The scholarships are accessible via the National Minority Commission or the National Scholarships Portal, where nearly 86 percent of the applicants belong to minority groups.
Starting in 2016, the digitisation of records has allowed for a direct transfer of scholarship related benefits. Consequently, a minority student who represents an institution with a minority quota is required to obtain a stamp or approval from the minority officer of that institution. This minority officer is expected to be authorised and stamped by the district nodal officer or the minority nodal officer. This constitutes the initial scrutiny process through which applications are assessed, as per the findings.
Sources within the Minority Ministry have told the television channel that a red flag was raised shortly after the current Minister of Minority Affairs, Smriti Irani, assumed her position.
It was discovered that students from class 1 to 8, accounting for nearly 40 lakh applicants, have been excluded due to the provision of free education. Given that education is already free in all government institutions and government-aided establishments, the necessity for scholarships for classes 1 to 8 landed under scrutiny. Currently, these scholarships provided to minorities are fully funded by the Centre. There is no longer a 50-50 participation split between the state or any other entity in these scholarships, the report said.
Between 2007 and 2021-2022, nearly Rs.22,000 crore has been dispersed. Annually an average of about Rs.2300 crore is dispersed. The eyebrows were raised within the ministry when 40 lakh scholarships were scrapped, there was no uproar.
Significant red flags include instances of multiple concentrations of accounts within a single bank branch, a single SIM card being linked to 22 scholarships within the same class, schools designated for tribals and girls, yet receiving scholarships meant for boys, institutions with no hostels claiming benefits meant for hostels. And other irregularities such as the number of scholarship applications surpassing the actual student enrollment.
Union Minister Smriti Irani in her reply in the Parliament during the recently concluded Monsoon session said the National Commission for Applied Economic Research (NCAER) has been commissioned to investigate the “irregularities".
There are estimated to be over 1.80 lakh institutions that fall under the category of entire minority-backed institutions or institutions for minorities. The NCAER has been mandated to probe the alleged irregularities in 100 districts across 34 states and union territories.
The Central Bureau of Investigation (CBI) is looking into the matter. Certain states have filed FIRs and made arrests, yet the issue still remains to be resolved even as some of the states under scrutiny are claiming that they have done so.
Last the Ministry of Minority Affairs approached the CBI to start the probe into this huge fraud.