Declared dead, 2,500 Odisha workers return for ration

Why in the News

An audit has found that 2,487 construction workers in Odisha were recorded as dead under the State’s Nirman Shramik welfare scheme, their nominees were paid death assistance, and the same workers went on drawing subsidised foodgrains under the National Food Security Act, 2013 (NFSA) and the State Food Security Scheme after their recorded deaths. In 753 of those cases the beneficiary authenticated Aadhaar biometrically to collect ration after having been officially declared dead. Rs 5.10 crore in death assistance was paid to nominees. The finding sits in the draft information system audit report on the Implementation of PA-ReSHRAM and Nirman Sharamik Portal in the State, and is expected to form part of the Comptroller and Auditor General (CAG) audit report for the financial year 2024 to 2025. The contradiction the audit exposes is between two arms of the same State government: one closed the worker’s file as deceased and paid out on it, while the other kept reading the same worker’s fingerprints every month.

What is the Nirman Shramik welfare scheme?

1. About: The scheme delivers welfare benefits to registered building and other construction workers in Odisha, with registration governed by the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996.
2. Eligibility: A worker must be between 18 and 60 years of age, must have completed at least 90 days of work in the preceding 12 months, and must not be enrolled in any other welfare fund.
3. Benefits on registration: Registered workers are entitled to educational scholarships for their children, assistance for marriage, maternity and funeral expenses, and death compensation.
4. Death benefits: A nominee receives Rs 2 lakh as death benefit and Rs 5,000 as funeral assistance on the death of an eligible registered worker.

What did the audit actually find?

1. Payment on a death that the State’s own records contradicted: Nominees of 2,487 workers received death assistance while those same workers continued to draw subsidised foodgrains after the recorded date of death.
2. Biometric proof of life after the recorded death: In 753 cases the beneficiary was physically present and authenticated Aadhaar to obtain ration, which the audit treats as direct evidence that the person was alive.
3. The quantum of the payout: Rs 5.10 crore was released to nominees on the strength of those death records.
4. Two systems, two verdicts on the same person: The government’s welfare record treated the worker as dead while its ration system was still recognising the worker’s fingerprints.

Where does the audit place responsibility?

1. Fraudulent disbursement, in the audit’s own terms: The draft report concludes that the combination of a live Aadhaar authentication and a paid death benefit indicates fraudulent disbursement of the death benefit.
2. The certification failure is named: The report states that the pattern also indicates that medical officers issued death certificates against living persons.
3. Where the finding is headed: The finding sits in a draft information system audit report and is expected to be carried into the CAG’s audit report for the financial year 2024 to 2025.
4. The response being sought: The Principal Accountant General (Audit-1) of Odisha sent the draft report to the then Additional Chief Secretary to the Labour and ESI Department, seeking a response on anomalies indicating corruption in the scheme’s implementation.

Challenges to construction worker welfare boards

1. Collection outruns disbursement: Welfare boards are financed by a cess on construction cost and carry large unspent balances while the workers the cess is collected for remain uncovered. Eg. The cess is levied at 1 per cent of the cost of construction under the Building and Other Construction Workers Welfare Cess Act, 1996.
   The Fix: Tie a board’s annual budget approval to its disbursement ratio in the previous year, so an accumulating balance becomes a reason to release funds rather than a cushion.
2. Registration lapses and is not portable: Cover depends on a work day threshold in the preceding year and on a registration held with one State’s board, so a worker who migrates or misses renewal loses entitlement. Eg. A worker moving to another State must register afresh with that State’s board.
   The Fix: Build a single national worker identity record that a destination State’s board reads directly, so registration follows the worker.
3. Claims are settled on paper certificates alone: A death benefit is released against a locally issued certificate and a nomination record, with no automatic check against any other government database. Eg. The audit records certificates issued in the names of people who were alive.
   The Fix: Validate every death claim against the civil registration database and the ration authentication log before the payment is released.
4. Welfare databases do not talk to each other: A death entered in the welfare register does not close the same person’s entitlement in the food security system, so one event produces two contradictory statuses. Eg. Ration continued to be drawn for years against names the welfare board had already settled as deceased.
   The Fix: Run a scheduled reconciliation between the welfare board’s death register and the food security database, with every mismatch raised as an exception for a named officer to clear.

Back2Basics: National Food Security Act, 2013

1. About: The Act converts subsidised foodgrain supply from a welfare provision into a legal entitlement for identified households.
2. Coverage: It provides for coverage of up to 75 per cent of the rural population and 50 per cent of the urban population.
3. Entitlement: Priority households receive 5 kg of foodgrains per person per month, and Antyodaya Anna Yojana households receive 35 kg per household per month.
4. Portability: Under One Nation One Ration Card, a cardholder may draw the entitlement from any fair price shop through biometric authentication, which is the authentication trail this audit relied on.

Conclusion

The fraud here did not defeat a control. It exploited the absence of one, because no process required the welfare register and the food security database to be read against each other. That makes the finding a design failure rather than a local scam, and the remedy a reconciliation rule rather than a set of recoveries. Two things follow the draft report: the Labour and ESI Department’s response to the Principal Accountant General, and whether the finding survives into the final CAG audit report for 2024 to 2025 with a recovery figure attached to it.

Matching Previous Year Question

“[2024, GS2, 10] “The duty of the Comptroller and Auditor General is not merely to ensure the legality of expenditure but also its propriety.” Comment.”