Bihar : Rs. 6000 crores scam in MGNREGS Tragedy For The Poor, Windfall For Others

Scams and scandals don’t stop following the Bihar Government, whether formed by a single party or by an alliance. And so it is that scams and scandals are also dogging the Nitish Kumar Government. Fresh disclosures have come up of a Rs. 6000 crores scam in the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in Bihar. The Delhi-based Centre for Environment and Food Security (CEFS) conducted a performance audit of the MGNREGS in Bihar from 2006-2011. This performance audit 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 MGNREGS. A total amount of Rs. 5977 crore or nearly Rs. 6000 crore (73 per cent of Rs.8189 crore) of MGNREGS funds have apparently been misappropriated by implementing authorities.
The performance audit has been conducted through sample surveys in 100 extremely deprived Dalit villages spread over 10 districts of Bihar. The field surveys 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 the Dalit community (majority of them MahaDalits – poorest of the Schedule Castes). Almost all the sample households covered under this survey are a 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 a majority of these deprived villages, MGNREGS is as good as non-existent for these most needy MahaDalits/Dalits but it has brought windfall gains for the implementing authorities.
The CEFS performance audit suggests that about 73 per cent of the wage component of MGNREGS funds 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. According to reports, “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”.
MGNREGS wages in Bihar have been misappropriated mainly in three ways:
8 The first is an inflated / fake job entry in the official records (muster rolls/job cards) of genuine and needy labour households and the beneficiary not being aware about the same.
8 The second is 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).
8 The third is through non-payment or only partial payment of the due wages to workers.
In this way, about 73 percent of the wage component of the MGNREGS fund has been siphoned off by implementing authorities in Bihar. There are reasons to believe that all this has been done in complicity with Block authorities and in most cases the District authorities are also an direct or indirect party to this loot. Without complicity of the Block and District authorities, open loot of this magnitude is impossible.
It is common knowledge that in MGNREGS, at the ground level, the percentage of misappropriation from the material component is far higher than the percentage of misappropriation from the wage component. That is 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 MGNREGA .
In the case of Bihar where 73 percent of the wage component of the MGNREGS funds have been misappropriated by corrupt and callous implementing authorities, there is no reason why the same authorities would siphon off a lesser proportion from the material component of MNREGS fund. After all, embezzlement from the material components is far easier and relatively risk-free.
The performance audit of MGNREGS 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 ‘job’ day 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 MGNREGA. It is distressing to note that this is the ground reality of MGNREGS employment in the extremely deprived and most needy villages of Bihar.

The  performance audit of MGNREGS 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 ‘job’ day during the previous one year ( January 2011-December 2011) .

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 MGNREGS 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.
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 the MGNREGS in Bihar. The mandatory Citizen Information Boards at the work sites containing essential information about the concerned MGNREGS projects are almost non-existent in Bihar but they have universal presence in the vouchers and bills of every MGNREGS project, as can be found in the online MGNREGA MIS records. Similarly, no one has ever seen any CRECHE at any MGNREGS project site, but they are universally present in the vouchers and bills of every MGNREGS project in Bihar.
Even after six years of the implementation of MGNREGA, 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.
In none of the surveyed villages has there been any Gram Sabha/Palli Sabha meeting for project selection or Social Audit of MGNREGS 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 MGNREGS projects. Villagers and labourers said that MGNREGS 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.
Parshuram Rai, Founder Director of CEFS, said the performance audit was done over nine to 10 months, covering 2,500 households. Rai said that “It was very difficult, as in many places they did not provide the report. The scale of pillage of funds is sickening.” State Rural Development Minister Nitish Mishra Monday said the government would conduct the physical verification of beneficiaries and areas covered under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). Mishra said “We have ordered a physical verification of all the facts related to the scheme.” Lok Janshakti Party (LOJPA) Chief, Ram Vilas Paswan also wrote a letter to Prime Minister Manmohan Singh and demanded a CBI probe on this MGNREG scam. Chief Minister Nitish Kumar has also said in the media that actions are been taken against the culprits of the MGNREGS scam. Till now, the State Government has investigated 2500 Panchayats out of 8422. Show cause notices have been sent to 1900 employees related to this corruption. FIR has been lodged against 130 MGNREGS employees from Planning Officer level to menial employee level. 250 MGNREGS employees have been suspended due to corruption charges. In addition to this more than Rs. 21 lakhs has been collected from them. If a CBI investigation is done in this case then the source of money for the different ‘Yatras’ of Nitish Kumar may become known and several leaders and officials may also be exposed.

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