Speaking to reporters at Tiruvallur on Monday, Palaniswami said some have misused the benefits under the PM-Kisan Scheme. Action is being taken against those people and recoveries of the amount have been made from their possession.
Under the PM-Kisan Scheme small farmers with two hectare or less land are given Rs 6,000 per year as assistance.
In some Tamil Nadu districts ineligible persons have availed the cash assistance with false information.
The case is being probed by the Crime Branch-Crime Investigation Department (CB-CID) and 16 persons have been arrested.
The scam first came to light at Cuddalore district and a probe was ordered by the District Collector there.
Alleging the scam runs into several crore of rupees, DMK President M.K.Stalin said in Palaniswami's home district Salem alone about 10,700 fake farmers have taken about Rs 4 crore under the scheme and their bank accounts have been freezed.
Stalin said Rs 4.20 crore has been recovered from fake farmers in Cuddalore district and Rs 4.50 crore in Villupuram district and complaints of scam has arisen in Tiruvannamalai, Perambalur and other districts.
The Leader of the Opposition in the Tamil Nadu assembly has also alleged scam in the Prime Minister's housing scheme wherein huge sums have been swindled providing fake accounts.
Questioning BJP for supporting the ruling AIADMK in the state, Stalin demanded a CBI probe into these scams.
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