A CAG audit of Madhya Pradesh government’s 2021-22 operations exposed severe financial mismanagement and corruption.
NEW DELHI: A detailed audit of the Madhya Pradesh government’s operations for 2021-22, conducted by the Comptroller and Auditor General (CAG) of India, has revealed severe financial mismanagement, fraudulent activities, and systemic inefficiencies. The findings expose multiple failures in the administration of disaster relief funds, land allotments, and welfare schemes, highlighting widespread corruption, delayed disbursements, and significant losses to the public exchequer. The audit report was recently made public, and the Chief Minister of the state during this period was Shivraj Singh Chouhan.
One of the most alarming revelations in the report is the fraudulent disbursement of Rs 23.81 crore in relief funds to unauthorised individuals across 13 districts. The audit found that government employees and their relatives fraudulently received relief meant for victims of natural calamities, including floods, droughts, and hailstorms. This was facilitated by forged sanction orders, fake beneficiary names used for e-payments, and unauthorised individuals receiving payments directly into their bank accounts.
The key factor enabling such fraudulent activity was the failure of both the global budgeting system and the Integrated Financial Management Information System (IFMIS), which allowed employees to siphon off funds undetected.
With the word “fraudulent” mentioned 184 times throughout the audit, the CAG report has called for immediate reforms, including disciplinary action and exemplary punishment against the responsible officials, a thorough review of the budgeting and financial systems, and an overhaul of the procedures governing land allotment and welfare schemes.
The report has emphasised the need for action against officials responsible for these fraudulent activities to ensure accountability and discourage future violations. The audit further recommended that the government initiate an independent investigation in uncovered districts to uncover any additional fraudulent activity, highlighting the scope of misconduct.
Additionally, the audit suggested an immediate review of the global budgeting system and the weaknesses in the IFMIS, both of which were found to have been exploited for personal gain by unscrupulous employees. This review was deemed crucial to prevent further recurrences of such frauds.
In Khandwa district, tehsildars disbursed Rs 164.31 crore to 105 co-operative societies intended for crop damage relief, yet discrepancies were found. These included payments made without proper beneficiary identification, a Rs 4.93 crore overpayment, and a Rs 8.28 crore discrepancy between the figures reported by the tehsildars and the co-operative societies. In several other districts, including Damoh, Dewas, and Raisen, delays ranging from 6 to 29 months in distributing Rs 563.72 crore in drought and pest infestation relief undermined the schemes’ intended purpose of providing timely assistance to affected farmers. The audit also pointed to a lack of proper documentation—such as loss statements and survey reports—which enabled fraudulent payments.
The management of government land was another area of significant concern highlighted in the report.
The audit found multiple irregularities in land allotments, some of which resulted in massive revenue losses. In Bhopal, a 20.234-hectare land parcel was allotted to the Azeem Premji Foundation, but the market value was incorrectly assessed, leading to a shortfall in premium, stamp duty, and registration fee payments, amounting to a loss of Rs 65.05 crores. Similarly, land allotted to IHBL (a joint venture company of three leading oil & gas central public sector undertakings) in Indore did not have the required panchayat cess levied, resulting in a revenue loss of Rs 70.13 lakhs.
The report revealed several cases where government land was allotted at zero premium or at nominal rates, resulting in further financial losses. For instance, land given to the Swami Vivekanand Technical Institute was allotted at Rs 1 in annual lease rent, resulting in a loss of Rs 12.94 lakhs in premium and Rs 25,889 annually in lease rent. The Airport Authority of India was similarly given land at zero premium and Rs 1 lease rent, leading to a loss of Rs 26.64 crores.
In a striking example of mismanagement, land allotted to Robert Nursing Home in Indore has remained unused for 77 years, despite the land’s market value of Rs 38.85 crores. This underlines not only the misallocation of land but also the failure to monitor and ensure that the allotted land was being utilised effectively.
The audit also uncovered a significant issue of encroachment on government land. In Bhopal, 37.69 hectares of government land near Vallabh Bhawan and the Collectorate had been encroached upon by slum dwellers who had raised temporary structures. Despite the high market value of this land, no action was taken to remove the encroachers or impose penalties. This inaction resulted in the continued unauthorised possession of government property worth Rs 322.71 crores.
Furthermore, discrepancies were found in land records. In 66 cases across 15 villages in seven districts, the manual khasra records did not match the online records. In some cases, the land area was reduced, while in others, it was increased, posing risks of future legal disputes and further loss of government property. The report also revealed widespread fraud and mismanagement in welfare schemes intended for unorganised workers. In one instance, Rs 2.47 crores in scheme funds were fraudulently drawn by CEOs of Janpad Panchayats in Rajpur and Sendhwa, in collusion with an accountant, and deposited into unauthorised bank accounts belonging to government employees and their relatives. Moreover, there were multiple instances of ex-gratia assistance being paid twice for the same deceased worker, once under the Sambal Scheme and again under the Building and Other Construction Workers Scheme, totalling Rs 89.21 lakhs in fraudulent disbursements.
Additionally, many individuals who were not eligible, including those over 60 years of age or already receiving assistance under other programmes like the Indira Gandhi National Old Age Pension Scheme (IGNOPS), were wrongfully sanctioned ex-gratia assistance totalling Rs 1.04 crores. Furthermore, the audit found that Rs 1.72 crores in excess assistance was paid in 86 cases, and Rs 54 lakh was not recovered from the successors of deceased persons.
The audit also revealed delays in providing welfare benefits. In 4,398 cases (36% of the total), funeral assistance of Rs 2.20 crore was not provided to the families of registered workers or their successors. In many instances, the ex-gratia assistance was sanctioned with delays ranging from one to 1,272 days and disbursed late by up to 1,013 days. These delays defeated the schemes’ objectives of providing immediate support to workers’ families.
Another significant issue was the mishandling of ex-gratia assistance funds. A total of Rs 2,077 crore was withdrawn and deposited into a bank account, but the interest earned—amounting to Rs 3.86 crore—was not deposited into the government account. This mismanagement further highlights the failure of the department in ensuring proper financial controls. As per the auditors, in 23 tehsils across eight districts, 2,364 out of 2,371 cases of unauthorised possession of government land resulted in penalties being levied.
However, the Rs 38.64 lakh in penalties imposed on 1,037 cases had not been recovered. The continuation of unauthorised possession from the date of the first ejection order led to a staggering Rs 71.68 crore in lost revenue, which could have been recovered if appropriate actions had been taken.