MNREGA scam in Orissa: Govt agrees to CBI probe

Government has consented to CBI probe into the alleged corruption in the utilization of central funds in Orissa for implementation of its rural job guarantee scheme under MNREGA.

Updated: Apr 11, 2011, 18:09 PM IST

New Delhi: Government has consented to
CBI probe into the alleged corruption in the utilization of
central funds in Orissa for implementation of its rural job
guarantee scheme under MNREGA, the Supreme Court was informed on Monday.

"The consent to have investigation into the alleged
misappropriation and diversion of funds for the scheme has
been given by the concerned minister (of Ministry of Rural
Development," Additional Solicitor General Indira Jaising told
a bench headed by Chief Justice SH Kapadia.

The ASG said since the Centre has taken a decision to
entrust the investigation, a notification in this regard will
be issued.

Advocate Prashant Bhushan, appearing for the NGO,
Centre for Environment and Food Security, which has filed a
petition on the issue, said the court can direct the CBI to
register an FIR.

However, the Bench asked the Centre to issue
notification for the CBI probe within two weeks.
The government decided to order CBI probe as the apex
court during the last hearing on March 14 had clearly said
that if the centre failed to take decision within four weeks,
it would step in to pass an order for CBI investigation.

Jaising placed before the bench a letter written by
the Ministry of Rural Development to the CBI last week to
probe the "alleged corruption and irregularities in the
implementation of MNREGA (Mahatma Gandhi National Rural
Employment Guarantee Act)".

In the April 4 letter addressed to the CBI Director,
the Department of Rural Development, said "it has been decided
to refer the Orissa case to the CBI".

"You are requested to kindly have the matter
investigated and cause to initiate criminal proceedings
against the delinquent officials under the relevant laws," the
letter to the CBI said asking its Director to take the case on

The Court also directed the Orissa Government to file
an affidavit stating as to what extent the directions of the
Centre has been implemented relating to the scheme.

During the last hearing, the bench had asked the
Orissa Government to tell the reasons why it has not
implemented the guidelines issues by the Centre for MNREGA.

Meanwhile, over the allegation of diversion of funds in
Uttar Pradesh and Madhya Pradesh, the bench said it would take
up the issue in the next hearing.

The apex court was hearing a public interest
litigation filed in 2007 by the Centre for Environment and
Food Security, alleging large-scale corruption in the
implementation of the programme for rural job under the
scheme which provides for legally-guaranteed 100 days of
employment to at least one member of each rural household.

Observing that it was the money of honest tax payers
which was being misappropriated, the bench also comprising
Justices KS Radhakrishnan and Swatanter Kumar had warned that
if the Centre fails to take a decision within the stipulated
time, then it would step in.

The bench had said the reports from Comptroller and
Auditor General of India (CAG) and National Institute of Rural
Development (NIRD) shows there was misappropriation of funds
to the tune of 88 percent in some districts of Orissa.

"Reports of CAG as well as of NIRD shows
misappropriation of funds allegedly by officials and
functionaries of the implementation agencies, resulting in
diversion of funds of honest tax payers of the nation," the
apex court had said adding such "leakage of funds" has
deprived the "beneficiaries from payment of their dues".

"We have gone through the reports of CAG and NIRD and
if the reports are true then serious action is to be taken,"
the bench had said.

The NGO had submitted that as per the reports, there
was misappropriation of funds between 53 percent to 88 per
cent in district of Kalahandi, Keonjhar, Naurangpur, Bolangir,
Raygada, Malakagiri and Koraput.

After being told by the NGO that there was also such
cases in Madhya Pradesh and Uttar Pradesh, the bench said
"for the time being we would focus on Orissa only. Let the
Centre take decision on a CBI inquiry".

On implementation of the Act in the spirit it was
meant for, the bench said direct transfer of payment to bank
account or post office account of beneficiaries will certainly

The bench said it will take up all states one by one
and beginning with Orissa since the allegations against Orissa
are most serious ones.

The apex court had on December 16 last, while hearing
the PIL, rapped both the Union and the state governments for
their failure in properly executing the rural job guarantee
scheme and asked them to explain as to why a CBI probe into
the fund embezzlement should not be ordered.

"We are constrained to observe that the Union of India
as well as the State of Orissa, prima facie, have failed to
effectively and purposefully implement the provisions of the
MNREG Act," the bench had observed.

"This has resulted in the deprivation of the entitled
class from getting employment and receiving the allowances due
to them in terms of the statutory guarantees available to them
under the Act," it had said.

Seeking their response on ordering a CBI probe, it
said, "We call upon both the Union of India and the State
Government to show cause as to why there should not be a
direction to the CBI to investigate this matter in accordance
with law."