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Corruption Alert: Scholarship Scam in Jharkhand

Scholarship Scam in Jharkhand, Global Youth Voice, gyv

Case of a major scam in a scholarship scheme for students of minority communities has come to surface in Jharkhand. Regarding the scholarship scam in Jharkhand, Indian economist and visiting professor of Ranchi University, Jean Dreze wrote to Sukhdev Singh (IAS) Chief Secretary to Government of Jharkhand.

The application read, “We are writing to alert you to a major scam in the centrally-sponsored scheme of scholarships for minority children in Jharkhand. It involves collusion between middlemen, business correspondents and school principals. Some Jharkhand State Minorities Finance and Development Corporation (JSMFDC) officials also seem to be involved.” The application comes attached with 9 case studies from Ranchi and Khunti. Dreze tagged  video testimonies among other things. The note further read, “Aside from embezzlement of public funds, this scam involves exploitation of minority children. We appeal to you to look into this matter and ensure that strict action is taken at the earliest.” The attachments can be found here.

Details regarding the scholarship

The scholarship is provided by the Ministry of Minority Affairs, Government of India. The government distributes this pre-metric scholarship in two tiers. Students in class 1 to 5 receive Rs. 1000 per annum. A student of class 6 to 10 receives Rs. 10700 if a hosteller or Rs. 5700 if day scholar. Moreover, it requires registration at the National Scholarship Portal (NSP). It further requires submission of the student’s educational documents, bank account details and Aadhaar number.

Scholarship scam involvement

The scam involves some private school owners, middlemen, banking correspondents (BCs) and Jharkhand State Minorities Finance and Development Corporation (JSMFDC) officials, as follows. First, the middleman approaches the school owner and proposes to divide the money between the two of them. That is, if the owner provides the school’s login and password on the NSP portal. For fresh applicants, the middleman opens new bank accounts for the students with the help of a BC. This is an easy job for the BC since it only requires the applicant’s Aadhaar card and fingerprint. Then later, the middleman applies for scholarship on behalf of all the eligible students in the month of June-July when the school reopens after summer vacation. Scholarships are disbursed through DBT by the central government, usually the following April, into the applicant’s bank account.

The mechanism leading to the scam

Once the scholarship is credited, the middleman and BC visit the school to take fingerprints of the students. Withdrawing all the scholarship money from students’ accounts with the help of PoS machine, the middleman only gives a small amount to the students and the rest goes to the scamsters (mainly the middleman, but also BC and school owner). The BC doesn’t provide any transaction receipt to the students. While sometimes the school owner himself or herself does not fully realise what is going on.

Oiling the scam machinery

The middleman often sidelines the school owner after procuring the school login and collects more Aadhaar cards along with bank details from fake applicants in minority neighborhoods, some of them adults. The middleman pays a small amount to the applicants as a bribe for sharing their Aadhaar card and bank details, and siphons off the rest of the scholarship money from their accounts as described earlier. To avoid any suspicion and accountability, the middleman tells them some fabricated story.

 

Click here to read the Letter to CS Jharkhand scholarship scam (2 Nov 2020)

 

The mechanism leading to the scam

Once the scholarship is credited, the middleman and BC visit the school to take fingerprints of the students. Withdrawing all the scholarship money from students’ accounts with the help of PoS machine, the middleman only gives a small amount to the students and the rest is divided among the scamsters (mainly the middleman, but also BC and school owner). The BC doesn’t provide any transaction receipt to the students. While sometimes the school owner himself or herself does not fully realise what is going on.

Oiling the scam machinery

The middleman often sidelines the school owner after procuring the school login and collects more Aadhaar cards along with bank details from fake applicants in minority neighborhoods, some of them adults. The middleman pays a small amount to the applicants as a bribe for sharing their Aadhaar card and bank details, and siphons off the rest of the scholarship money from their accounts as described earlier. To avoid any suspicion and accountability, the middleman tells them some fabricated story.

Calls for urgent investigation

Some middlemen and school owners also enter bogus information about the school to claim higher scholarship amounts. Following this, the money ultimately goes to the middleman and accomplices, except for a small amount paid to the students. Moreover, some JSMFDC officials’ role and identity need further probing. Aside from embezzlement of public funds, this scam involves exploitation of minority children. It calls for urgent investigation.

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