Why CAG red-flagged student scholarships that Maharashtra spent over Rs 7,000 crore on

A report of the Comptroller and Auditor General of India (CAG) has pointed to lapses in the implementation of the direct benefit transfer (DBT) scheme in student scholarships for the weaker sections of society in Maharashtra. The performance audit has pointed to various lacunae, such as beneficiary mobile numbers being linked to more than one applicant and some institutes and colleges mentioning erroneous intake capacities, which resulted in more applications being approved. The CAG report has also revealed how ineligible wards of serving or former state and central government employees may be benefitting from the scheme.

The DBT scheme is pitched as a major reform of the Union government to ensure timely delivery of welfare to the people. The ‘Maharashtra DBT’ system was launched in 2018 as an electronic platform for direct transfer of benefits and subsidies to the beneficiaries. Online disbursement of scholarships to students was one of the key schemes.

The CAG report on ‘Implementation of Direct Benefit Transfer in Scholarship Schemes of Other Backward Bahujan Welfare Department, Government of Maharashtra’ was tabled in the Maharashtra legislative assembly on August 4. Rs 7,227.58 crore was disbursed as scholarships by 10 state departments from 2018-19 to 2019-20 through the online DBT system.

Maharashtra’s Other Backward Bahujan Welfare Department (OBBWD), with the highest expenditure of Rs 2,751.47 crore (38.07 per cent) on scholarships disbursed through DBT, was selected by the CAG for review. Two schemes, the centrally-sponsored post-matriculation scholarship for Other Backward Classes (OBC) students and the state-funded post- matriculation scholarships for Vimukt Jati and Nomadic Tribes (VJNT) students, were taken up for detailed scrutiny.

The disbursal of scholarships is through the Maharashtra State DBT and Services (MahaDBT) portal, developed by the Maharashtra Information Technology Corporation Limited (MahaIT), a state government unit.

A valid mobile phone number is a prerequisite for the verification and authentication process since it is done by sending an OTP. The notification regarding disbursement is also sent on the registered mobile number. Therefore, the mobile number being fed should be correct and must belong to the applicant.

The CAG audit revealed instances of the same mobile number being linked to multiple applications. “That mobile numbers were linked to more than one application indicated the absence of validation checks to ensure acceptance of only unique mobile numbers by the MahaDBT system. Without a unique phone number, the applicant would not be aware of the status of the disbursement of the scholarship or any changes required to the application and thus would be dependent on intermediaries, thereby undermining the objective of DBT system to eliminate intermediaries,” the CAG report noted.

At the time of their registration on the MahaDBT portal, institutes and colleges are required to enter their course-wise intake capacity. The audit noticed that the system did not have any validation check to ensure the correctness of data entered. Absence of a validation check resulted in the system depicting more approved applications than the intake capacity of these institutions or colleges. “Verification carried out by audit revealed that the intake capacity was wrongly entered in the MahaDBT system by the colleges/ institutes, which was also not checked by the departments. The system neither had a validation check to ensure the correctness of data entered nor did it generate any management information system or exception report to flag such error for rectification,” the report stated.

“Scholarships approved for disbursements were plagued with significant issues, such as non-disbursement and time lag in disbursement of scholarship from bill generation to final credit to the applicant/ college. The audit observed that the scholarship amounts were often disbursed in the years subsequent to the academic year to which the application pertained. The deficiencies warrant that the government take appropriate action for reducing the time period in disbursement of scholarships using the DBT system,” the CAG report stated.

As per state and central government orders, students were eligible for scholarships subject to the condition that parental income did not exceed Rs 1 lakh per annum. As proof, students were required to submit income certificates of parents issued by the state revenue department.

To ascertain whether this condition was being fulfilled and the income certificates genuinely reflected the income status of the applicants, the audit ascertained whether the applicants’ parents were state government employees or state government pensioners. “Satisfaction of any of these conditions would largely indicate that the annual income would be above Rs 1 lakh. For this purpose, the mobile numbers of the parents were compared with the General Provident Fund employees’ and pensioners’ mobile numbers. The analysis revealed cases where the applicants’ parents were either serving state government employees or pensioners/family pensioners,” the report noted.

A system of cross-verification of data was found to be absent in the MahaDBT system since it was not integrated with other state government systems. Biometric attendance system was also not integrated with the MahaDBT system. The state government should ensure data integration amongst various government agencies, including biometric attendance of students, for improving the reliability of data in MahaDBT, the report added.

The security audit plays a vital role in ensuring that web-based applications are free from vulnerabilities that may lead to these being hacked or compromised. The CAG audit revealed that security certification of the MahaDBT portal was not carried out, though a period of more than one year had elapsed from the last certification in August 2020. The state government should ensure that a security audit of the application is carried out at specified intervals without fail, the report emphasised.

Though the entire DBT system was online, submission of bills to the treasury for approval and disbursement of funds to the scheme-specific bank account continued in offline mode, exposing the system to risks associated with the manual process. The government may, hence, review the existing manual processes in the DBT system for re-engineering and integration with the MahaDBT system, the CAG report added.

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