Kerala: CAG Report Flags Irregularities In Youth Employment Programme Of 'Kudumbashree'

Round-tripping, a term recently highlighted in the Hindenburg Report accusing the Adani Group of massive tax evasion, is now also linked to Kerala's Kudumbashree, the famed poverty eradication mission.

It has been discovered that round-tripping, albeit on a smaller scale, was one method used to siphon off government funds by firms selected by Kudumbashree to provide jobs for poor youth.

This rural round-tripping was revealed in the latest Comptroller and Auditor General (CAG) Report on Local Self-Government Institutions, presented in the Assembly on Thursday (11 July), as per a report by onmanorama.com.

Kudumbashree's failure to detect round-tripping and other fraudulent practices by the firms it selected raises two possibilities: either it is inefficient, or its staff colluded with the fraudsters.

The fraud occurred under the youth employment scheme, Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY), launched by the Union Ministry of Rural Development (MoRD) in September 2014.

The scheme aims to impart skills to rural youth aged 15 to 35 from poor families and provide them with jobs with regular monthly wages. The funding is shared by the Centre and states in a 60:40 ratio.

Kudumbashree, as the implementing agency in Kerala, selected firms to provide skill training and released funds based on job placements.

Full payment was to be made if the placement success rate was 70 per cent, and proportional payment if it was between 50 per cent and 70 per cent.

The CAG, after scrutinising the records of 26 firms chosen by Kudumbashree in five districts (Thiruvananthapuram, Thrissur, Palakkad, Malappuram, and Kannur), found that these firms forged documents to fraudulently claim second and third instalments, with Kudumbashree failing to intervene.

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