Minority Scholarships: Rs 3,400 crore unspent, panel says revive scheme in states ‘with no irregularities’

The parliamentary standing committee on social justice and empowerment has recommended reviving minority scholarship schemes, but “in those States/UTs where no or very less irregularities have been reported”. The standing committee tabled its report in Lok Sabha on Wednesday.

Key minority scholarships, including the pre and post-matric scholarships, have been stalled for five years due to “irregularities”. The schemes have not been approved for several years pending the Central Bureau of Investigation’s probe into charges of corruption. Statistics shared in the report show that 609 institutes across states were found to be fully or partially fake and FIRs were filed later.

At 178, Uttar Pradesh had the highest number of such institutes, followed by Rajasthan with 126. FIRs were filed against 69 institutes in Madhya Pradesh.

“Scholarship funds are being siphoned by a nexus of bank staff, middlemen, school, and govt. employees,” says the report.

The parliament panel, led by BJP’s PC Mohan, has now told the ministry to restart the schemes in states where fewer irregularities were found. “The committee feels that withholding the approval of the scheme pending recovery of the embezzled amount of Rs 144 crore by institutes across the states is injustice to the minority students for no fault of theirs,” says the report.

The pause in these scholarships has also meant that large chunks of their budgets have gone unspent for years. The report notes that over Rs 3,400 crore of the allocated budget for minority scholarships remained unspent from 2023-25 till 2025-26. Last year, the government had told parliament that less than 20% of the budget for such scholarships had been utilised in 2024-25.

Further, in union budget 2026-27, the merit-cum means scholarship saw Rs 6 lakh budget and post-matric scholarship saw its outlay cut by 33%.

Minority Scholarships: Fake institutes

The report by the committee, led by BJP MP PC Mohan, slammed the government for suspending minority scholarship approvals from 2021-22 and halting disbursal of funds from 2022-23. The stated reason has consistently been “gross reporting of irregularities in the implementation of the scheme”, the report stated.

Amongst the states, Uttar Pradesh, Rajasthan, Madhya Pradesh and Assam had the highest number of fake or partially fake institutes.

Minority Scholarships: States with most irregularities

The scholarships include pre and post-matric and merit cum means scholarships which were aimed to help students from minorities stay in school from Classes 1 to 10. However, after several cuts, it was limited to Classes 9 and 10. Post-matric scholarship supports students from Class 10 till higher education.

Careers360 has been reporting on the irregularities, including the CAG report which highlighted Rs 9 crore disbursed to 11,000 beneficiaries who could not be traced or whose schools were non-operational. Till now 121 FIRs and 55 chargesheets have been filed with around Rs 9.33 crore received by the states.