The investigation into the ₹71 crore MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) scam in Gujarat's Dahod district has intensified with the arrest of Kiran Khabad, the younger son of Gujarat Panchayat and Agriculture Minister Bachu Khabad. Kiran was apprehended by police on the Vadodara-Halol highway early Monday morning, May 19, 2025. This arrest comes shortly after his elder brother, Balwant Khabad, was taken into custody on Saturday, May 17, in connection with the same scam.
The alleged fraudulent scheme involves large-scale misappropriation of funds meant for tribal employment and rural development in the Dhanpur and Devgadh Baria talukas of Dahod district. Officials claim that government funds intended for creating rural jobs and building basic infrastructure were siphoned off through forged documents and for non-existent construction work. Investigators report that fake bills and inflated estimates were submitted for public works that were never actually executed.
Construction firms allegedly operated by the Khabad brothers, namely Raj Construction and Raj Traders, have been identified as central players in the scheme. According to the investigation, tenders for various works, including check dams, borewells, handpumps and rural roads, were awarded to these firms. However, these projects were either never built or grossly over-invoiced. Shri Raj Traders reportedly received ₹30.04 crore, while Shri Raj Construction Co. was paid ₹82 lakh.
The scam was initially uncovered by B.M. Patel, Director of the District Rural Development Agency (DRDA), who flagged inconsistencies in expense reports and project verification documents. A subsequent audit revealed ₹60.9 crore in fraudulent bills in Devgadh Baria and another ₹10.1 crore in Dhanpur alone. The audit also revealed that between 2021 and 2025, villages like Kuva, Redhana, and Simamoi were falsely marked as beneficiaries of completed MGNREGA projects, while little to no work was done on the ground.
A Special Investigation Team (SIT) has been formed to probe the conspiracy further. So far, apart from the Khabad brothers, several others have been arrested, including former Taluka Development Officer Darshan Patel, technical staff, Gram Rojgar Sevaks, Devgadh Baria APO Dilip Chauhan, Dhanpur APO Bhavesh Rathod, Dhanpur Taluka Development Officer Rathva, Parth Baria, the proprietor of N J Enterprise, and Rasik Rathwa, the in-charge deputy district development officer (DDO) of Dahod.
The opposition Congress party has alleged that the government did not act despite repeated complaints about corruption in the MGNREGA scheme in Dahod. They have demanded a Special Investigation Team (SIT) to probe the matter thoroughly. Minister Khabad is facing serious allegations of abuse of power and nepotism, with claims that he directly facilitated the awarding of contracts to his sons' companies. Critics argue that the scale of the fraud would not have been possible without political backing at the highest level. A formal written complaint has been submitted to the Chief Minister of Gujarat Bhupendra Patel, urging strict action and an independent investigation into the matter.
With the scale of the scam still unfolding and an estimated ₹160 crore in suspicious claims still under review, the political and administrative fallout is expected to be significant, especially in the run-up to upcoming elections.
