Welfare scam: State ponders direct cash transfers to avoid scams

Apr 04, 2014, 10:20 IST | Sharad Vyas

The state government has said that enquiries into the welfare scam would be completed within a month and the guilty punished soon; officials also considering direct cash transfers to beneficiaries to avoid mismanagement

Acting on the exposé by this newspaper, the Maharashtra government says the enquiries into the multi-crore welfare scam would be completed within a month and action taken against the guilty soon after. Reacting to questions on what the government is doing to act on the malpractices in the Central Stores Purchase Organisation (CSPO), a subsidised kirana shop run by the government for purchase of welfare goods, Industries Minister Narayan Rane said allegations and counter allegations within the department are flying thick, and a thorough probe is needed to look into them. 

Also read: Exposed: Maharashtra govt's Rs 450-crore welfare scam

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“The scam has come to light because of internal rivalries between the contractors. Therefore, we need to be doubly sure that all sides are heard before arriving at a judgment,” he said. On being asked if he was aware of widespread
irregularities in his department, Rane said a swift probe had been ordered to nab the culprits.

“Nobody will be spared if found guilty in the ongoing probes, that much I can promise from my side,” he said.

mid-day investigations had revealed that government contracts for purchase of welfare goods worth R451.88 crore were awarded to second-rate contractors by the CSPO. These contractors produced bogus documents obtained from fictitious foundries at Ahmednagar and Rajkot, and fake test reports from Mumbai laboratories to get the deals done, between 2010 and 2013. Of these, R271 crore was found by the income tax department to be routed through hawala agents, with money claimed from the government without any delivery of goods. Schoolchildren, young girls and working women ended up with shoddy goods, or no goods at all.

As many as six officials and eight contractors are under the scanner in a multi-crore welfare scam in the purchase of welfare goods. Multiple-agency probes from the state industries department, home department and the Anti-Corruption Bureau (ACB) are looking into the scam.

New policy
Meanwhile, the government is also formulating a procurement policy for decentralising procurement of welfare goods, including recommending transfer of direct cash to the beneficiaries’ accounts.

On Wednesday, the state said it would soon table in the cabinet a new policy for procurement, which will recommend decentralising the procurement process to the panchayat-level, and e-tendering instead of rate contract for reserved products.

“Moreover, reservations on firms empanelled year after year will be removed. We may go as far as to suggest direct transfer of cash to beneficiaries. If a student wants to buy a cycle, let us give them R3,000 so that they can make their own choice,” said Apurva Chandra, principal secretary (industries).

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