PAC grills Centre, States on ‘fraud markers’ flagged by CAG in SC scholarship schemes

The Public Accounts Committee (PAC) of Parliament on Thursday (October 15, 2026) grilled the Union government and several State governments over their responses to gaps, including “fraud markers”, in the implementation of pre- and post- matric scholarships for Scheduled Caste students identified by the Comptroller and Auditor General of India.

The PAC, headed by Congress MP K.C. Venugopal, is likely to move privilege notices against the Chief Secretaries of six States who were supposed to appear before it on Thursday (October 15, 2026) to explain the gaps flagged in the 2025 CAG report but failed to do so, The Hindu has learnt. Further, with the Union government responding to the gaps by saying the implementation burden was on State and Union Territory administrations, the PAC has given the Union Social Justice and Empowerment Ministry one month’s time to submit a detailed action-taken report on each of the issues flagged by the CAG.

In its 2025 report, the CAG audit had flagged a plethora of issues related to the administration of the pre-matric and post-matric scholarships for SC students. These included 40.75 lakh beneficiaries from as many as 14 States receiving scholarships with delays ranging from one to 90 months; over 3.5 lakh beneficiaries not receiving their scholarships at all; over 5,700 cases of scholarships being disbursed without proper checks of income eligibility; over 6,000 cases of non-SC beneficiaries receiving the scholarships meant for SC students; and issues related to beneficiaries receiving double payments, short payments, and excess payments.

During the PAC hearing on Thursday (October 15, 2026), the Chief Secretaries of Uttar Pradesh, Karnataka, Punjab, Odisha, Bihar, and Madhya Pradesh were supposed to appear for briefing the Members; however, none of the States had deputed the respective officials, sources told The Hindu. Further, the committee Members questioned the Secretary, Social Justice and Empowerment, on why action-taken reports against each point highlighted in the CAG audit were not submitted.

The Social Justice Ministry is learnt to have told the committee that since the implementation of the scholarship schemes rests with the State governments, it was unable to file action-taken reports as the respective State governments had not shared them with the Union Ministry. Upon further questioning, the Union Ministry has assured that the reports will be submitted in a month’s time.

Both the pre-matric and post-matric scholarship schemes are Centrally sponsored schemes, with the Union government sharing the financial burden on a 60:40 ratio with State and UT governments (90:10 for northeastern States). From 2017-24, a total of 52,878 crore was spent on these two schemes, of which about ₹30,234.5 crore came as the Union government’s share.

The committee went on to ask the Union Ministry why the CAG audit had shown continuing instances of fraud markers (such as same caste certificates being used by multiple beneficiaries in Uttar Pradesh, students in Odisha receiving scholarships in seemingly common bank accounts, and over ₹13 crore being paid in Haryana to beneficiaries where Aadhaar and bank details were not matching) if Direct-Beneficiary Transfers alongside the Aadhaar Payment Bridge System were meant to weed out dummy beneficiaries, as stated by the Union government.

The committee also pointed out during the hearing that the shift to the DBT method had resulted in significant drops in the number of beneficiaries in both the pre-matric and post-matric scholarships for SC students. It noted that despite time for recovery, the 2025-26 figures for the post-matric scheme had reached only 36.07 lakh beneficiaries against a target of 76.55 lakh beneficiaries.