The scandal surfaced when the Cabinet Sub-Committee looking into the fee reimbursement issue realised that only 9,903 colleges out of the 12,309 registered their details online as part of the official mandatory exercise.
"We believe that more than 2406 colleges that did not register online could be bogus," state Social Welfare Minister Pilli Subhash Chandra Bose said. All these colleges drew the fee reimbursement amount from the state government in the last couple of years, since there was no check on them, he said.
"We have now asked the Higher Education Department to conduct a detailed inquiry into the issue and establish the quantum of funds such fly-by-night institutions had swindled. We shall initiate criminal action against those found guilty of misappropriating government money," Bose said.
Preliminary estimates indicated that a sum of Rs 380 crore could have been siphoned off in the name of fee reimbursement, highly-placed sources said. The state government has spent about Rs 3,000 crore towards reimbursement of tuition fee for students pursuing higher and professional education.
With too many claims for fee reimbursement and allegations of funds misappropriation, government initiated measures like online registration of colleges and submission of notarised income certificate by students.
"The inquiry will establish how the scheme is being subverted by unscrupulous elements," Bose said.