PAC grills Centre, states on ‘fraud marks’ flagged by CAG in SC scholarship schemes

Congress MP and Public Accounts Committee Chairman KC Venugopal speaks to the media after a PAC meeting in Delhi on October 15, 2026. | Photo credit: ANI

Parliament’s Public Accounts Committee (PAC) on Thursday (Oct 15, 2026) grilled the Union government and several state governments over their responses to loopholes, including “indicators of fraud”, in the rollout of pre- and post-matriculation scholarships for scheduled caste students identified by the Comptroller and Auditor General of India.

The PAC, led by Congress MP KC Venugopal, is likely to file privilege notices against the chief secretaries of six states who were supposed to appear before it on Thursday (October 15, 2026) to explain loopholes identified in the 2025 CAG report, but failed to do so, The Hindu has learnt. Besides, when the Union government responded to the deficiencies by stating that the burden of implementation rested on the state and Union territory administrations, the PAC gave the Union Ministry of Social Justice and Empowerment one month to submit a detailed report on the action taken on each of the issues flagged by the CAG.

The CAG audit in its 2025 report highlighted a number of issues related to the administration of pre-matriculation and post-matriculation scholarships for SC students. These included 40.75 lakh beneficiaries from as many as 14 states who received scholarships with a delay of one to 90 months; more than 3.5 thousand beneficiaries who do not receive their scholarships at all; more than 5,700 cases of scholarships being paid without proper verification of income eligibility; more than 6,000 cases of recipients of scholarships intended for non-SC SC students; and issues related to beneficiaries receiving double payments, short payments and overpayments.

During the PAC hearing on Thursday (15 October 2026), the Chief Secretaries of Uttar Pradesh, Karnataka, Punjab, Odisha, Bihar and Madhya Pradesh were scheduled to appear to brief the MPs; however, none of the states have sent the relevant officials, sources told The Hindu. Further, the committee members questioned the Secretary, Social Justice and Empowerment as to why action reports were not submitted on each point highlighted in the CAG audit.

The Ministry of Social Justice told the committee that since the implementation of the scholarship schemes rests with the state governments, it could not report on the measures taken as the respective governments had not communicated them to the Union ministry. On further inquiry, the Union ministry assured that the reports would be submitted within a month.

Both pre-matriculation and post-matriculation scholarship schemes are centrally sponsored schemes with the Union Government sharing the financial burden in the ratio of 60:40 with the State and UT Governments (90:10 for North Eastern States). A total of ₹ 52,878 crore was spent on these two schemes during 2017–24, of which about ₹ 30,234.5 crore was the Union Government’s share.

The committee further asked the Union ministry why the CAG audit showed continued cases of fraudulent indicators (such as same-caste certificates being used by multiple beneficiaries in Uttar Pradesh, students in Odisha receiving scholarships in seemingly ordinary bank accounts, and over ₹13 million paid in Haryana to beneficiaries where Aadhaar bank details and Aadhaar-Beadne bank details did not match) The system was meant to weed out fake beneficiaries, the Union government said.

The committee also pointed out during the hearing that the switch to the DBT method has led to a significant drop in the number of recipients of pre-matriculation and post-matriculation scholarships for SC students. It noted that despite the recovery time, the figures for 2025-26 for the post-matric scheme reached only 36.07 million beneficiaries against the target of 76.55 million beneficiaries.

Published – 15 Oct 2026 21:56 IST