In today's Finshots we see how fake farmers swindled the government of nearly ₹4000 crores

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The Story

Over the last couple of years, the Indian government has lost nearly ₹4,000 crores thanks to a scam that not many have heard of. And no it doesn’t involve banks and rich businessmen. Instead, the elaborate fraud was perpetrated by farmers or at least people pretending to be farmers.

Confused? Okay, let’s take it from the top.

It began 3 years ago — In February 2019. The government had launched the PM Kisan Samman Nidhi Yojana (PM Kisan) to support farmers and alleviate some of their financial troubles. The idea was to pay them ₹6,000 a year and deposit this sum into their bank accounts directly. This, they hoped would supplement a farmer's income.

But not every farmer was eligible. The government developed a system to determine eligibility and let state officials validate this data. Farmers could also self-register or have a government-appointed executive feed their information if they so desired. But at the end of it all, a few select officials were responsible for verifying and finalizing the list. And you can probably see how some enterprising individuals could game this system already. Especially if they were in cahoots with the officials.

And no prizes for guessing here because that’s precisely what happened.

News of ‘fake farmers’ began to emerge rather quickly and states began unearthing dubious entries in the database. An investigation followed soon after and they found some truly incriminating stuff.

Assam reported that 8.35 lakh ‘farmers’ siphoned off ₹558 crores. In Tamil Nadu, nearly 6.97 lakh farmers were able to swindle ₹321 crores. In Karnataka, ₹440 crores went to 4 lakh ineligible farmers. And in Uttar Pradesh, a whopping 21 lakh ‘farmers’ were found to have received money that they shouldn’t have.

So, how on earth did people fleece the central government out of ₹4,000 crores, you ask?

Well, in some cases, Lord Hanuman, actor Riteish Deshmukh, and ISI spy Mehboob Rajpoot (Akhtar) were all involved.

Yeah, it was identity theft at its finest.

According to The Quint, scamsters simply used a database with publicly available Aadhar numbers. They then created fake Aadhar cards and opened a bank account by leveraging the fraudulent ID. And since anyone could self-register on the PM Kisan portal, they simply fed their phone number and dubious land record details and got it approved. The system and the officials were caught sleeping on the wheel.

In other cases, even the common folk decided to game the system. For instance, look at Assam — a state where Aadhar isn’t really needed to benefit from welfare schemes. Farmers were asked to present a bank account as a unique ID. So some smart people simply set up multiple bank accounts. They self-registered on the PM Kisan portal several times with new bank accounts and they got their records approved each time. The system only had checks to invalidate bank accounts with inconsistent information — like those with invalid account numbers and erroneous IFSC codes. But it did little to prevent this scheme.

Assam would soon become one of the epicentres of PM Kisan scam.

In Tamil Nadu, the middlemen turned into scammers themselves. Many farmers depended on state officials (or contract workers) to have their information uploaded on the database. And agents here clearly saw an opportunity to make an extra buck or two. They told naive farmers that the government was giving out ‘Corona Money’. They jotted down all the details. And then used the login credentials of government employees to validate the farmers applications. You can imagine that these agents probably pocketed a bribe for their ‘services’ of course.

And as per reports published by Scroll and The Quint, there was also the matter of misplaced political incentives.

Remember that the general elections in the country took place in April 2019? Well, the PM Kisan scheme was launched shortly before that. And it seems like government officials in Assam wanted to add as many beneficiaries as possible in as little time to gain a political advantage. So they turned to Service Centres that were authorized to do all the data entry. And they gave them targets. Now, these agents didn’t care who they were adding to the list or how they were adding them. They just needed to hit their daily target . And because it was all time-bound, the authorities who were supposed to verify all the details turned a blind eye. As a result, ‘farmers’ who weren’t eligible got the payout too.

The end result? A whopping ₹4,000 crores lost into the void.

Having said that, the government has been able to recover a bit of this money. It asked banks to dip into those fraudulent accounts and reverse the transactions. But it’s been hard work to find the perpetrators. For instance, in one case in Assam, they found that someone had hacked into the system and created a new ID pretending to be a government official. The new ID gave this individual the power to add and verify new beneficiaries. But when the authorities tried to track the IP address of these user IDs, it led them…to a traffic roundabout in Lucknow!!!

So yeah, many “eligible” farmers were deprived of the benefits thanks to the many ineligible “farmers” who seemingly wanted to pocket the money. And we hope and pray that the government soon rectifies the system.

Until then…

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