A major financial irregularity and fake billing scandal linked to the Pradhan Mantri Awas Yojana (Urban) has triggered political and administrative shockwaves in Karnataka after the Karnataka Lokayukta uncovered an alleged network that raised crores of rupees in bills for houses that investigators claim were never actually built.
The investigation revolves around housing projects sanctioned under PMAY (Urban)-2022 for beneficiaries living in notified slum areas in Ramdurg town of Belagavi district. According to preliminary findings, officials associated with the project allegedly colluded with private contractors to prepare fake work progress reports and fabricated construction bills, which were then processed through official channels to obtain government payments.
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As part of the investigation, Lokayukta teams conducted simultaneous raids at multiple locations, including the Karnataka Slum Development Board office in Hindalga, Belagavi, the residence of a retired assistant executive engineer in Hubballi, the National Projects Construction Corporation (NPCC) office in Bengaluru, and several other premises linked to accused individuals in Vijayapura and Bagalkot districts.
Investigators seized a large number of project-related files, financial records and official documents during the searches. Officials believe the documents may reveal how construction approvals, inspection reports and payment clearances were allegedly manipulated over several years.
According to investigators, many of the houses shown as completed in official records allegedly did not physically exist on the ground. Despite this, staged payments were reportedly released in phases after the works were certified as completed. Authorities suspect serious manipulation in project monitoring, construction verification and payment authorisation procedures.
Those under investigation include retired assistant executive engineer Shambulingappa BS, contractor Prasad NP associated with the National Projects Construction Corporation, and several other officials connected with the implementation of the housing project. Investigators are now examining whether there was coordinated collusion at multiple administrative levels to facilitate the alleged fraud.
Lokayukta officials said the investigation has also uncovered major procedural lapses in project execution and monitoring. In several cases, mandatory physical site inspections were allegedly not carried out. Investigators further found that GPS-based photographic proof, which is generally required to verify completion of housing works, was missing in multiple files. Despite the absence of such verification, construction projects were reportedly marked as completed and payments were cleared.
Official records show that 13 partial bills were submitted between March 29, 2019 and June 12, 2023. Based on these bills, approximately ₹29.4 crore was released between April 2019 and November 2024. However, investigators estimate that construction materials worth only around ₹6.1 crore were actually supplied to nearly 600 beneficiaries, while the remaining ₹23.3 crore is suspected to have been misappropriated.
Experts associated with financial crime investigations and public infrastructure monitoring say fake billing and paper-based construction frauds continue to pose serious challenges in government welfare schemes across India. According to specialists, weak field verification, inadequate digital oversight and lack of independent audits often create opportunities for large-scale corruption in public housing projects.
Sources said investigative agencies are now conducting forensic analysis of banking transactions, payment approvals, inspection records and digital documentation linked to the project. Authorities are also examining whether the alleged fake billing network had links to influential contractors or individuals providing political or administrative protection.
The case has intensified concerns over transparency and accountability in large public welfare schemes funded through taxpayer money. Investigators believe further scrutiny of financial trails and project approvals could lead to additional revelations in the coming weeks.
For now, the Karnataka Lokayukta continues its investigation, and officials indicate that more raids, questioning and possible legal action may follow as the financial and documentary evidence is examined in detail.
