A significant financial scandal has emerged in Gujarat, implicating the son of a state minister in the embezzlement of funds allocated to the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme. Balwant Khabad, the son of Bachu Khabad, the Minister of State for Panchayat and Agriculture, was apprehended by police on Saturday, May 17, 2025, in connection with the alleged misappropriation of Rs 71 crore.
The arrest follows an investigation into widespread irregularities within the MGNREGA program in the Dahod district, specifically in the Dhanpur and Devgadh Baria talukas. Authorities have uncovered a network of fictitious infrastructure projects, including roads and bunds, that existed solely on paper. Funds intended to provide employment for tribal communities were allegedly diverted through falsified certificates and fabricated invoices to agencies connected to the minister's sons.
According to the Dahod Deputy Superintendent of Police, Jagdish Bhandari, Balwant Khabad and Darshan Patel, the Taluka Development Officer (TDO) have been arrested, and further investigations are actively being pursued. Meanwhile, Bachu Khabad's younger son, Kiran Khabad, is currently evading arrest.
The scandal came to light after B M Patel, the Director of the District Rural Development Agency (DRDA), reported substantial anomalies in project implementation in Devgadh Baria and Dhanpur. An ensuing audit exposed the fraud, tracing it back to Raj Construction and Raj Traders, companies managed by Balwant and Kiran Khabad. Both brothers had previously sought anticipatory bail, which they later withdrew as evidence mounted against them.
The investigation revealed that between 2021 and 2025, several villages, including Kuva, Redhana, and Simamoi, were falsely listed as beneficiaries of completed MGNREGA projects. However, on-site inspections revealed minimal to no actual work, only forged completion reports and a trail of illicit payments.
The probe further uncovered the involvement of 35 material suppliers, 28 from Devgadh Baria and seven from Dhanpur, who allegedly facilitated fake claims with the collusion of local officials. Senior officers are suspected of overlooking these fraudulent activities, allowing the scam to proliferate across various administrative levels.
In response to these findings, the District Development Officer (DDO) has suspended all ongoing MGNREGA payments. Audits have revealed missing logs, non-existent work sites, and widespread document forgery. Authorities estimate that approximately Rs 160 crore in fraudulent claims are currently under scrutiny. A Special Investigation Team (SIT) has been established to conduct a more in-depth investigation. Initial findings indicate that Rs 60.90 crore in fake bills have been traced in Devgadh Baria and Rs 10.10 crore in Dhanpur, with investigators anticipating that these figures will rise as more regions are examined.
According to the FIR, companies that did not win the bids for supplying materials to MGNREGA projects were awarded contracts by subverting the process, and their bills were cleared. The DRDA probe also revealed that several bills were allegedly cleared for projects passed on paper that did not exist on the ground – particularly in Kuva village in Devgadh Baria, where villagers brought the scam to the notice of the district officials.
The Dahod district police had earlier arrested five people in the case, including two accountants of the MGNREGA branch, Jayveer Nagori and Mahipalsinh Chauhan; Gram Rojgar Sevaks Kuldeep Baria and Mangalsinh Pateliya; and technical assistant Manish Patel.
Opposition leaders are calling for a thorough and impartial investigation into the matter. Congress Leader Amit Chavda has demanded the formation of a Special Investigation Team (SIT), alleging that the scam could be much larger and that only an honest investigation can uncover full details.
