Karnataka worst among 8 states with rampant MNREGS graft: CAG

The Comptroller and Auditor General of India, which tabled its second performance audit report on the government's flagship Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) in Parliament on Tuesday, found major lacunae and irregularities in its implementation, particularly in eight states.

A major corrupt practice revealed by the CAG relates to wage payments, where 'ghost' workers are registered and paid even though they don't exist.

Karnataka had the highest number of ghost workers among the eight states, estimated at 3,077. It was followed by Assam, where 2,016 non-existent workers were on the muster rolls and were paid an amount of Rs20.59 lakh in 2011-12.

The audit also found financial irregularities in the costing of raw materials.

In the eight states, there were cases of suspected misappropriation of funds to the tune of Rs128.23 crore as no supporting vouchers related to payments were available on record, the national auditor said in a statement.

''I don't deny that funds have been misappropriated or have been diverted. This is happening in all the states. At our level, we can write letters to states and demand a CBI (Central Bureau of Investigation) inquiry.

''It is the responsibility of the states to act on the findings of investigation. At most, we can stop releasing funds to states, but I am not in favour of it,'' rural development minister Jairam Ramesh told reporters after the CAG report was tabled.

''One state, despite taking action against the erring officials, gave them immunity,'' he added, without naming the state.

The minister said he has no objections to the findings of the CAG report. ''I don't want to criticise it. We had kept some facts before CAG and some have been accepted. The report has both positives and negatives. We will work on improving drawbacks pointed in the report,'' he said.

In 12 states and one union territory (UT), instances of the cost of material exceeding the prescribed ratio were noted, a CAG press release said.

''In the test checked districts of 25 states and union territories, 102,100 inadmissible works - not listed under the Act - amounting to Rs2,252.43 crore were taken up,'' the report said.

''These inadmissible works included construction of earthen/kutcha roads, cement concrete roads, construction of raised platforms for cattle and other animals, and construction of bathing ghats.

''Works amounting to Rs4,070.76 crore were incomplete despite passage of significant time, rendering the expenditure unfruitful.''

The programme ''showed significant decline in per rural household employment generation in the last two years. The per rural household employment declined from 54 days in 2009-10 to 43 days in 2011-12'', the CAG said.

''There was also a substantial decline in the proportion of works completed in 2011-12. It was also observed that Bihar, Maharashtra and Uttar Pradesh, which constituted 46 per cent of the rural poor, accounted for only 20 per cent of the total funds released under the scheme. This indicated that the correlation between poverty levels and implementation of MGNREGA was not very high,'' the audit report said.

The CAG stated that ministry of rural development has written to the state government for an inquiry into "ghosts" working under the scheme.