The social audit in Bhilwara district of Rajasthan in October this year has brought to light the ugly network of financial and administrative frauds, being perpetrated in the panchayat works under NREGA. Rajasthan had come to be recognised as NREGA's flagship state in the country. Union Minister of Rural Development C P Joshi is the MP from Bhilwara.

The social audit was conducted by Rozgar Evum Suchna Adhikar Abhiyan (RESAA - right to employment and information campaign) led by Aruna Roy, who had been a member of the National Advisory Council, then chaired by Sonia Gandhi. This has been mentioned only to underline the fact that the October audit had assumed significance not only for the flagship state but also for the country. This was an unprecedented joint social audit exercise.

This can be seen from the fact that at the end of the social audit, a rally was held on October 11, 2009 in Bhilwara itself to welcome the audit team. The rally was presided over by Union Minister CP Joshi. State ministers also congratulated the audit team. What happened after the audit's results were known, however, was nothing short of a revolt by sarpanchs, local panchayat officials, bureaucrats and even politicians, who pressured the Gehlot Government to terminate the audit.

Why this hullaballoo against the participation of civil society in a joint social audit? This would require a close look at the social audit results, a copy of which is now available with the daily 'The Hindu' which has revealed many incontrovertibly odious cases of corruption.

Bhilwara district has 381 panchayats. The audit team selected 11 panchayats for focussed attention while the remaining panchayats were left to the 11 'padyatri teams 'to cover in 10 days. These teams were given the task of checking that panchayat works complied with the NREGA 2005 by holding 'physical inspection' of works, job cards, muster rolls and so on through feedback from villagers. Writing in The Hindu (16-17, December 2009), Vidya Subramaniam says: 'Damning evidence was emerging of diversion of NREGS funds by a defrauding mechanism that went all the way up from the sarpanchs at the bottom to block and district level staff. The padyatris reported missing job cards, fudged or absent muster rolls, and improper maintenance of other NREGS documents.' Vidya adds that later reports from other districts corroborated the corruption; it also came to light that the district collectors of Chittorgarh and Dholpur had been recommended for suspension for irregular use of NREGS funds.

It is another matter that the last measure inflamed the IAS fraternity, adding more muscle to the anti-audit campaign. And the NREGA Commissioner for Rajasthan, Rajendra Bhanawat, who had recommended suspension of the two District Collectors, was transferred. This weakened the pro-audit set-up of the State NREGS.

Bhilwara audit unearthed cases that startled everybody and the corruption regime. Take the case of gram panchayat, Para. The bills for construction material gave the name of suppliers as 'Devnarain Krishi Firm'. Auditors found that there was no firm of this name. A call on the phone listed in the Firm was answered by the sarpanch's son; this single firm had supplied material worth Rs 25 lakh. In the same panchayat, another supplier firm, 'Nakowda Agency' refuted the statement of having supplied any material.

In another gram panchayat, Sangwa, auditors found that a fake firm, 'Dinesh Kumar Trivedi' was stated to have supplied material worth Rs 40 lakh mentioned on 'kachcha bills'. This firm was also noted to have supplied kerosene. A visit to the location found a ramshackle shop having no stock of materials claimed to have been supplied. In panchayat, Devaria, it was found that no supplier by the name of 'Tulsiram Putra Ramji Teli” existed. Another supposed suppliers ' Gopi Putra Gokul Teli” gave it in writing to the auditors that the bills mentioned in their names were false.

The audit report of Soniana gram panchayat in Chittorgarh district was filed as late as December 6, 2009. The inspection report revealed pervasive irregularities in inviting tenders as also absence of technical sanction for most civil works. Moreover, over the years, the gram panchayat had gradually edged out labour component from NREGS, undermining the very premise of the job guarantee programme. For instance, the fund utilisation of Soniana panchayat showed that out of the allocated Rs 3.81 crore for 2009-10, only 10 per cent had gone towards labour wages as against the mandated 60 per cent. While funds drawn by the panchayat increased from Rs 22.70 lakh in 2007-08 to Rs 3.81 crore in 2009-10, the proportion spent on labour wages progressively decreased from 67 per cent to 10 per cent.

Actually, Soniana audit had assumed importance for a different reason. Bhilwara audit revelations of frauds in panchayats works under NREGS had set off panic among sarpanchs, panchayat staff, bureaucrats, politicians, etc. who seemed to have collectively decided to challenge the Government on its move to extend the Bhilwara model of civil society-Government social audit to the whole of Rajasthan. The State Government had actually announced that social audit would be held in one panchayat in 32 districts of the State's 38 districts. But with the protestors including sarpanchs, panchayat staff, MLAs, MPs not only of the Opposition but also of Congress taking to the streets, the Gehlot Government chose to succumb to the pressure and cancelled the plan to go for social audit in other districts. In this backdrop, the selection of Soniana panchayat for Government inspection was only to appease the civil society critics of the Government surrendering before the flouters of law. Here too, the situation was found to be equally awful.

Yet again, when Aruna Roy and RESAA activists met Chief Minister Gehlot, both sides agreed to drop saturation social audit and have 'model social audit' in one chosen panchayat from each district in two batches through November-December. In this model, the participation of civil society representatives was kept minimum: only two. In this context, the highest spending panchayat, Madhogarh in Alwar district was selected for the model audit. And it was to start with a two-day training programme for the panchayat staff on November 21-22. But on November 18, the Gram Sevak of Madhogarh locked up the panchayat office, reported sick and disappeared with NREG records. The BDO broke up the locks in the presence of the District Collector. Since records were missing, an FIR was filed against the Gram Sevak, the sarpanch and the Rozgar Sevak (NREGS secretary).

Rajasthan has 9000 panchayats. The Bhilwara audit teams had examined vouchers relating to material purchases in 11 panchayats. The audit teams 'conservatively' estimated diversion of NREGS in the audited panchayats to the tune of Rs 1.5 crore, that is Rs 12 lakh per gram panchayat. Though, it is said, the sample size may have been too small, it gave a fair picture of the 'volume of potential corruption” under NREGS at anywhere between Rs 800 crore and Rs 1,000 crore. This is so keeping in view that allocation of NREGS funds in Rajasthan for 2009-10 was Rs 9,525 crore, up from Rs 6,175 crore the previous year. This amount was to be split in the ratio of 60:40 between labour wages and material costs.

RESAA has declared that it will continue the fight for social audit of NREGS works, as required by law, in Rajasthan. The question is that the issue involves billions of rupees meant to provide guaranteed employment on demand and create assets for Bharat Nirman, too. What the social audit, even a limited one, in Rajasthan panchayats has revealed is that money meant for the targeted impoverished rural groups is being gobbled up by the rural vested interests.

And this question cannot but be of concern to civil society groups in Rajasthan alone. Should not the organised labour, now having jointly held dharnas countrywide, lend their full-throated support to the struggle of the Rajasthan civil society to ensure that NREGS resources meant for works to provide jobs to rural poor should not be allowed to be pilfered?

The issue involved is of course much larger. The UPA Government continues to advertise on TV channels that under NREGA, four crore people are being provided jobs in 619 districts in the country at Rs 100 per day per person. Congress general secretary Rahul Gandhi has been saying that NREGA is changing the rural dynamics in rural India. But after the revelations made by the social audit in Rajasthan, it remains a matter of conjecture whether silence in other states on this issue augurs well or is an ominous pointer? (IPA Service)