Maharashtra Govt Turns Blind Eye To Blank Cheques Scam
Take a dash of illogical bureaucratic rules. Add a handful of unscrupulous government functionaries. Mix with a set of callous contractors and stir well. And you have the makings of a classic scam.
Given the existence of all these factors, there is an air of inevitability about the discovery of the latest scam that has been brewing for years within the Maharashtra government.
First, the rules. Various government departments are required to exhaust their budgetary allocations, and the states irrigation and public works departments are no exception.
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Except that the two departments hit upon a novel method of achieving their allocation targets.
The modus operandi: as March 31 approached every year, the two departments unleashed a flood of blank cheques to contractors.
In fact, the bunching up of cheques that were deposited by the cartel of contractors created an embarrassing situation for the Maharashtra government, which was forced to seek a temporary overdraft of about Rs 250 crore in April 1996 with the Reserve Bank of India.
However, the government stumbled upon this practice only between January and March 1997. Even then, the scam would probably not have come to light if the Maharashtra government had not faced a severe financial crisis.
Faced with a shortfall of about Rs 1,200 crore in financing its annual plan, the government issued a diktat in December that any cheque issued by any department for over Rs 25 lakh had to be cleared by the finance ministry.
According to government sources, The pernicious practice thrived like a letter of credit system. The spending would be in phases throughout the year 25 per cent in the first three months, 15 per cent in the next, 30 per cent in the third quarter and the remaining 30 per cent would be kept untouched till the fiscal-end.
This remaining 30 per cent would then be spent through issue of blank cheques from the middle of March onwards, the sources added.
The huge sums involved in the scam can be gauged from the fact that the 1996-97 state budget alone allocated Rs 2,200 crore for the irrigation department and Rs 1,300 crore for the public works department (PWD).
Apart from its December directive, the ministry also monitored the bills situation on a daily basis, said a finance department source.
The source added that a major contributing factor to the success of the governments purse-tightening measures was the anti-corruption movement launched by social reformer Anna Hazare and the subsequent Puranik committee appointed by the government to inquire into graft allegations against two senior ministers.
These factors also reined in any opposition from the political powers-that-be against stringent austerity measures, the source pointed out.
Nevertheless, the government has still not instituted any inquiry into the blank cheques scam. No further developments have been recorded since the government stumbled upon the innovative practices of the two developmental departments. And work goes on as usual at the Mantralaya in Mumbai, even as another scam is added to the long list that have proliferated in the 50 years since Indias independence.