Inadequate follow-up action hinders anti-graft measures in rural job scheme

Rigorous social audits in the four southern states have led to higher detection of misappropriation of funds under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). However, inadequate follow-up action against errant officials has hindered efforts to curb corruption and recover misused funds.

Experts point out that most states across the country have a poor record in conducting social audits, limiting their ability to detect corruption or recover siphoned funds.

Since the inception of the scheme, state-level Social Audit Units (SAUs) have reported 11.16 lakh cases nationwide, detecting misappropriation amounting to Rs 1,995 crore. Of the total misused funds, nearly 71 per cent has been reported from four southern states — Tamil Nadu, Andhra Pradesh, Telangana and Karnataka.

In contrast, weak social audit mechanisms in several northern, northeastern and western states have resulted in fewer reported cases and minimal detection of corruption.

For instance, in Karnataka, between 2006 and 2026, the Directorate of Social Audit reported 1.34 lakh cases involving misappropriation of Rs 327 crore. During the same period, Gujarat’s SAU detected only 76 cases, amounting to a loss of Rs 21 lakh.

Tamil Nadu has reported the highest number of cases (3.37 lakh), with misappropriation of Rs 410 crore over the past two decades. Andhra Pradesh (2.48 lakh cases; Rs 477 crore) and Telangana (1.61 lakh cases; Rs 199 crore) rank second and third, respectively, while Karnataka stands fourth. The remaining 30 states and Union Territories (UTs) together account for 2.33 lakh cases involving Rs 581 crore.

Satish Modi, Assistant Professor at Indira Gandhi National Tribal University, Amarkantak, Madhya Pradesh, whose team has studied the implementation of SAUs in a majority of states, said: “Unlike in South India, governments in the rest of the country have not given due importance to SAUs. Though mandated, many states have not even constituted SAUs, resulting in continued fund
leakage.”

Section 17 of the MGNREGA Act makes social audit a statutory requirement. Gram Sabhas are mandated to monitor and conduct social audits of works to ensure transparency and accountability. The Act also requires State governments to establish or identify independent SAUs to facilitate these audits.

In 2025–26, a Central monitoring team visited nearly 55 districts across the country and observed several irregularities, including absence of works on the ground despite records showing execution, implementation of non-permissible works, financial irregularities, improper documentation, splitting of works to obtain approvals from lower-level authorities, engagement of contractors in violation of the Act, fake or inactive job cards, manipulated muster rolls, and creation of incomplete or poor-quality assets not aligned with local development needs.

Raichur-based social activist Abhay Kumar said corruption in MGNREGS is prevalent, as in other government schemes. “Compared to the rest of India, southern states have been auditing works as mandated by the Act. However, the bigger issue is prevention of corruption, punishment of culprits, and recovery of swindled funds. Unfortunately, all states have failed in this regard,”
he said.

Government data tabled in Parliament shows that between 2015 and February 2026, 113 FIRs were filed nationwide for fund misappropriation, 1,114 officials were suspended, and 1,854 employees were terminated. Nearly 18 states and Union Territories recorded zero FIRs during this period. The country is yet to recover nearly Rs 305 crores of swindled funds.

Sameer Shukla, Secretary, Rural Development and Panchayat Raj Department, said cases of fund misuse flagged by SAUs account for less than 1 per cent of the total works undertaken by the state over the years.

“The number of cases reported by SAUs highlights that the state has been closely monitoring MGNREGS works. Strict action has also been taken against errant officials,” he said.