Explained: Alleged NREGA scam in Gujarat, in which Minister Bachubhai Khabad’s sons were arrested

What is the alleged scam?

It came to light when BM Patel, Director of the District Rural Development Agency (DRDA), discovered significant irregularities in the payments for incomplete projects under the MGNREGA.

The projects spanned two villages in the Devgadh Baria taluka and one village in the Dhanpur taluka, where several metres of road construction were left incomplete. However, payments were still made to “unauthorised agencies” using forged completion certificates between April 2021 and December 2024.

Thirty-five unauthorised agencies, which did not participate in the tender process or emerge as the lowest bidders, received payments regardless. Two of them – Raj Construction and Raj Traders – are run by Balvantsinh and Kiran.

What does the case FIR say?

The DRDA director filed an FIR on April 24, stating that the three villages reported forged completion reports with payments “made in connivance” to “unauthorised” agencies for supplying raw materials. Of the 35 agencies, 28 in Devgadh Baria received payments for non-existent roads.

The FIR states, “An inspection was carried out of the projects under the MGNREGA schemes undertaken between January 1, 2021 and December 31, 2024, in the villages of Kuva and Redhana in Devgadh Baria taluka and Simamoi village in Dhanpur taluka. It came to light that despite being incomplete, the completion certificates and false evidence were forged to complete the payments for these works…”

“All the unauthorised agencies as well as government officials concerned and other MGNREGA staff, in connivance with each other and as part of a prior criminal conspiracy, executed fraud and criminal breach of trust by using forged documents to cause a loss to the government treasury…,” it added.

Officials said Rs 71 crores of payments were allegedly made on “forged” bills to unauthorised agencies. A claim amount of Rs 150 crores made under the MGNREGA projects is also under scrutiny in the same case. Police officials said that the “actual estimate of the amount of loss to the state treasury” is yet to be ascertained.

According to the FIR, the alleged scam in Kuva village involves 41 MGNREGA works, including roads and check dams. Of the 25,066 metres of road shown as completed, only 15,176 metres were constructed. The biggest discrepancy was in Simamoi in Dhanpur, the Khabad family’s home taluka. Across the 38 MGNREGA works, only 3,492 meters out of 19,200 metres of roads have been constructed, but full payment was made.

What has the political fallout been?

Along with Balvantsinh and Kiran, officers such as the then Taluka Development Officer (TDO) of Devgadh Baria were arrested. Dilip Chauhan, a former Assistant Programme Officer (APO) and a distant relative of the Khabads, is also among the 14 accused arrested so far.

All accused people have been arrested under Bharatiya Nyay Sanhita Sections [316(2), 316(5)] (criminal breach of trust), 318(4) (cheating), 336(2) (forgery), 338 (forgery of valuable security, will), 340(2) (Forged document or electronic record and using it as genuine), 61(2) (criminal conspiracy).

The opposition Congress has been demanding Khabad’s resignation, and Congress leader Amit Chavda has also sought the formation of a Special Investigation Team, calling the ongoing investigations an “eyewash”. Khabad, in two video messages released Tuesday and Wednesday, has expressed faith in the process, claiming his sons were “only involved in a legal business of supplying materials” and did not have the “responsibility of completing the projects”.

In the last Budget session of the Gujarat Assembly, even before the FIR was filed, opposition leader Amit Chavda had alleged corruption of over Rs 100 crore in MGNREGA in Dahod. He also sought an investigation by the Vigilance Commission.

Belonging to the Koli community that falls under the Other Backward Classes (OBC) category, Khabad is a four-time MLA from the Devgadh Baria constituency. He first won the Assembly constituency in 2002 with a margin of 51,157 votes. Thereafter, Khabad won in the 2012, 2017 and 2022 elections, and declared assets worth Rs 92 lakh in the 2022 Assembly polls.

In November 2022, ahead of the Assembly polls, the Congress had accused Khabad of “orchestrating the withdrawal of the nomination” of NCP candidate Gopal Lavre, as the Devgadh Baria seat was in a seat-sharing alliance between the Congress and the NCP. Khabad won with a lead of 44,201 votes and a vote share of 58.27% against Aam Aadmi Party (AAP) candidate Vakhala Bharatsinh.

He has been a minister in the Gujarat government since 2014, handling portfolios such as animal husbandry, fisheries, forest and environment, rural housing, rural development, and cow conservation.

Khabad has cited agriculture and business as his occupations. He is also associated with various religious and educational institutes. On Wednesday, as he skipped the weekly Cabinet meeting in Gandhinagar, Khabad released a video where he lashed out at “critics for accusing him of going underground” amid the scam allegations. He said he was busy with the party’s organisational work and that the “truth will be brought out” by the investigations.

Sources in the BJP said that following Balvantsinh’s arrest, the party is considering multiple options, such as dropping him from the council of ministers.