Hyderabad: The Comptroller and Auditor General (CAG) of India has unearthed large-scale fraud and systemic corruption in Telangana’s flagship Sheep Rearing Development Scheme (SRDS). The audit revealed that benefits were extended to at least 860 farmers who had been deceased for over a year—and in some cases, for more than three years—before the distribution of sheep units under the scheme.
Sanction orders were issued in the names of the deceased between 14 to 36 months after their deaths, raising serious questions about oversight, beneficiary verification, and the authenticity of government records. The scheme, launched in April 2017 by the then BRS-led state government, aimed to empower shepherd communities and boost meat production in Telangana.
Ghost Beneficiaries and Fake Sanction Orders
The discrepancies came to light when the CAG auditors cross-verified SRDS records from the government’s e-Laabh portal with death claims settled under the Rythu Bima insurance scheme. The cross-check revealed that 860 farmers who had already passed away between September 2018 and January 2020 were granted sheep units between March 2021 and December 2021.
Contradicting the government’s claim that these units were given to legal nominees, the CAG audit report found no supporting evidence or digital trail on e-Laabh to back this assertion. The auditors concluded that these were most likely posthumous disbursements to fictitious or misrepresented beneficiaries.
Fake Transport Invoices and Implausible Sheep Movements
The CAG’s test audit across seven districts unearthed further irregularities involving manipulated transport invoices and bogus vehicle documentation:
- Ambulances, two-wheelers, and even fire tenders were shown as having transported up to 210 sheep per trip.
- 336 invoices included vehicles registered as auto rickshaws, buses, cars, or motorcycles—none legally permitted to transport livestock.
- In some cases, the same vehicle was shown to have transported sheep from two different, geographically distant districts on the same day, raising suspicions of forged logistics documentation.
In total, irregularities in sheep transport claims amounted to Rs 27.20 crore, based on fake or implausible vehicle use.
Duplicate Ear Tags and Recycled Sheep Units
Adding to the suspicious transactions were signs of duplicate ear tags assigned to multiple sheep, indicating a likely recycling of sheep units to show repeat distribution and falsely claim subsidies. In many instances, sheep were likely never delivered, and funds were misappropriated by fraudulent vendors in collusion with departmental insiders.
The CAG’s audit found that from 2017–18 to September 2021, 1,34,505 sheep units were claimed in just seven districts, with Rs 1,153.94 crore spent as subsidy. The state-wide figure stood at Rs 3,385.32 crore spent on 3.88 lakh sheep units as of December 2021.
ED Investigation Corroborates Fraud, Seizes Documents and Devices
The Enforcement Directorate (ED) launched its own probe under the Prevention of Money Laundering Act (PMLA), 2002, building upon FIRs registered by the Anti-Corruption Bureau (ACB) and complaints from genuine sheep merchants.
According to the ED:
- Government funds were funneled into accounts of individuals and entities with no prior involvement in sheep trade.
- Bogus vendors were used to route payments, with no evidence of actual sheep purchases.
- Kickbacks were paid to government officials, and dummy/mule accounts were used to launder funds.
Search operations conducted at eight locations in Hyderabad included premises linked to G. Kalyan Kumar, former Officer on Special Duty (OSD) to then Animal Husbandry Minister Thalasani Srinivasa Yadav. One FIR even alleged that records were illegally removed from departmental offices after the government change.
Seized materials included:
- 31 mobile phones, over 20 SIM cards, blank cheques, passbooks, and debit cards linked to 200+ fake bank accounts.
- Documents connecting the scheme’s proceeds to an illegal online betting app were also discovered, hinting at a broader money laundering nexus.
State Response and Accountability Questions
The Telangana government, in response to CAG’s observations, claimed that in cases where sanction orders were generated prior to a beneficiary’s death, sheep units were handed over to their legal nominees. However, the CAG rejected this defense, citing the complete absence of supporting documentation and noting that the sanction orders were actually issued after the deaths had occurred.
The extent of alleged fraud, coupled with the audacity of misusing emergency vehicles and fictitious vendors, has raised serious concerns about administrative negligence and potential political shielding during the previous regime.