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Not Just West Bengal's Chit Fund Scam, India Has a History of Frauds Worth Thousands of Crores

West Bengal crisis is not the only biggest political tussle between central and state governments. Alleged political vendetta and the misuse of CBI has long been in news and many such big scams that became a fodder for this tussle.

Ghazanfar Abbas | News18.com

Updated:February 12, 2019, 1:49 PM IST
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Not Just West Bengal's Chit Fund Scam, India Has a History of Frauds Worth Thousands of Crores
West Bengal Chief Minister Mamata Banerjee leaves after announcing the end of her 46-hour-long 'Save Constitution' dharna (sit-in) in Kolkata on February 5 (Image: PTI)

An unprecedented confrontation took place between the Central government and the West Bengal government that led Chief Minister Mamata Banerjee to opt for a sit-in, after CBI versus Kolkata police face-off on Sunday evening. The tussle deepened further when both the governments — Centre and the state — started accusing each other of “constitutional break-down”.

The war of words began after the CBI officers showed up at the residence of Kolkata police commissioner Rajeev Kumar, in connection with its probe into the Saradha ponzi scheme, a multi-crore chit fund scam case.

Subsequently, the CBI went to the Supreme Court with notices issued to Kumar and the apex court suggested they approach the Calcutta High Court, which had issued a stay order on the CBI notices. Meanwhile, Mamata Banerjee continued her sit-in. All opposition parties, including Congress came to her support.

The agency had begun its probe in 2014 on the orders of the Supreme Court. Interestingly, former Trinamool Congress vice president Mukul Roy, who was also an accused in the scam, joined the BJP during probe.

This, however, is not the only biggest political tussle between central and state governments ever. Alleged political vendetta and the misuse of CBI has long been in news and many such big scams that became a fodder for this tussle include National Rural Health Scheme (NHRM) in Uttar Pradesh, Fodder Scam in Bihar and Mining Scam in Odisha.

In terms of worth, Mining Scam in Odisha is at top where over Rs 9,000 crore was involved. The total money involved in the NHRM, Fodder and Saradha scams are Rs 5,700 crore , Rs 950 Crore and Rs 2400 crore, respectively.


Mining Scam in Odisha

Comptroller and Auditor General (CAG) had found massive irregularities in Odisha’s mining administration which caused exchequer losses worth over Rs 9,000 crore between 2006 and 2011 under Biju Janata Dal (BJD) head and state chief minister Naveen Patnaik. Leaders of various political parties, including the ruling BJD, bureaucrats and influential persons are allegedly involved in this scam.

Recommending a CBI probe into the alleged scam, Justice M B Shah Commission constituted an inquiry and submitted its report to the center in October, 2013.

As a fourth term CM of the state since 2004, Patnaik’ BJD as part of NDA, had an alliance with BJP in Odisha since 1998 till 2009. As the country is approaching towards the 2019 Lok Sabha elections the bitterness between the two parties emerged with a war of words between BJP head Amit Shah and Naveen Patnaik. In Janaury this year Patnaik had slammed Shah asking him to wait for the results of 2019 elections to see who is thrown out of power in the state following Shah’s furious speech against Patnaik.


The alleged scam in this central government’s scheme to improve health care in rural areas, came into light when two successive chief medical officers were murdered in Uttar Pradesh’s capital Lucknow in 2010 and 2011. CAG had found anomalies in spendings of around Rs 5700 crore.

Babu Singh Kushwaha, the then Minister of Family Welfare, who was the main accused in the case, had shortly resigned the party and joined the BJP. The CBI started probing the case and charge-sheeted Babu Singh Kushwaha, and Pradeep Shukla , former principal secretary of the department in the state, along with several government officials. It was then when the political rift over the matter started between BSP and BJP, however Congress led UP government was in power in the center.

But Bahujan Samajwadi Party chief Mayawati, the then Chief Minster was grilled by CBI in October, 2015 during the current NDA government. Mayawati alleged that BJP was trying to bully her by using the central agency.

Fodder Scam

Five cases of fodder scam took place in Bihar during four consecutive governments is about embezzlement of government funds with the fraudulent transactions by the of Animal and Husbandry department (AHD) of Bihar. This was highlighted when Income Tax (I-T) raded AHD officials in 1993. In 1997, Sushil Modi, the then Bihar state chief had demanded inquiry against Lalu Yadav.

In May 2012, a CBI court in Ranchi had awarded four to seven years imprisonment to 40 persons convicted in the scam and also slapped fines on 29 convicts. At that time Lalu Yadav’s Rashtriya Janata Dal (RJD) had a coalition government as part of grand alliance before its break-up by Nitish Kumar, Chief minister of Bihar and Jananta Dal United (JDU) head in July 2017, who controversially formed government with BJP.

Later in March 2018, RJD supremo Lalu Prasad was sentenced by the special CBI court to 14 years in jail with a fine of Rs 60 lakh.

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