Karnataka Government Acts On Irregularities In COVID-19 Expenditure.

In a recent shift in Karnataka’s political climate, the state government took a decision after the Justice Michael D’Cunha Commission of Inquiry submitted its report. The investigation commission probing the alleged irregularities in the purchase of equipment and medicines during the COVID-19 period has found possible syphoning of hundreds of crores, putting the ruling Congress government in a state of action as it initiates a slew of measures that address these findings and ensure accountability. Such serious financial improprieties will have consequences and this whole scenario will be under direct spotlight as it could set precedent for now the governments approach such crisis and their management of the same.

Commission’s Findings and Report Details

The Justice Michael D’Cunha Commission of Inquiry was constituted in August 2023 with the mandate to look into COVID-19 management irregularity allegations from the date of the imposition of the first lockdown in March 2020 till December 31, 2022. The interim report produced by the commission on 31 August 2024 consisted of a detailed survey of 11 volumes amounting to 1,722 pages, which was submitted to the Chief Minister Siddaramaiah.

The “partial” report as it has been termed by Law and Parliamentary Affairs Minister H K Patil reportedly covered an expenditure of Rs 7,223.64 crore. Though the minister did not mention the amount of misappropriation, he said the commission has suggested recovery of Rs 500 crore. According to sources, the amount of misappropriation might be as high as Rs 1,120 crore, which indicates that management of finances during the pandemic was not carried out appropriately.

The commission’s inquiry is quite exhaustive and has verified 55,000 files from the concerned departments. However, the inquiry is far from complete. Reports from four zones in Bruhat Bengaluru Mahanagara Palike (BBMP) and 31 districts of the state are yet to be received and indicate that the full extent of the irregularities may be unprecedented.

Adding fire to the matter is that the fact that Chief Minister Siddaramaiah told the Cabinet that the report of the commission had stated that many crucial files were not found. They had not been provided to the commission despite repeated orders in this regard. This document trail has not only questioned the intent of possibly holding back the pieces of information but has also raised questions on competency of people who may have added to the complexity of the case by not providing relevant documents and even reports to the investigating commission.

The government has given the commission an extension of six months to try and complete findings of inquiry as it believed that this is a complex and vast story.

This means there would be greater revelations awaiting the public as the commission edged into the complex intricacies of pandemic spending.

Government’s Response and Action Plan

In response to the report of the Commission, the Karnataka government has come out with a multi-faceted approach towards rectifying the irregularities and preventing it from happening again, in the future. The Cabinet headed by Chief Minister Siddaramaiah has taken several important decisions:

Constitution of a Special Investigation Team (SIT) – The government has resolved to constitute an SIT in view of its belief that criminal intention is involved in this misappropriation. This investigation team would probe into all criminal aspects of this irregularity so that those culprits who made a mockery of public expenditure at the hands of the government during the pandemic would be identified and prosecuted.

Constitution of Cabinet Sub-Committee – In view of the fact that this situation needs to be closely overseen and monitored constantly, a Cabinet sub-committee shall be constituted. The Cabinet sub-committee shall coordinate closely with the SIT and study its reports, advising actions to be taken step-by-step further.

Committee of Top Officials – The government has decided to constitute a committee of top officials to go into details of the judicial inquiry report. The committee, which has Chief Secretary Shalini Rajneesh and Additional Chief Secretary (Finance) LK Atheeq among others, would be given one month’s time to study Justice Cunha’s report and decide further course of action. “Identify specific officials accused of dereliction of duty,” the government said.

Recovery Initiation – It has been decided to initiate the recovery proceedings immediately, without waiting for the final report. Recovery proceedings will be initiated against the firms or establishments which have engaged in the wrongdoings.

Blacklisting of Concerned Firms – Firms that have been found to have indulged in the irregular practices within the period of pandemic will not be allowed to be reinstated for further government contracts.

Minister H K Patil clarified that the current report does not contain details regarding who exactly was involved in the scam, but such details will feature in the final report. This means that after the complete probe by the commission, more targeted actions against certain officials or groups may be taken.

Political Fallout and Responses

The revelations in the Justice D’Cunha Commission report have severe political undertones since the alleged irregularities occurred during the tenure of the erstwhile BJP government. Thereby, the current Congress administration has been embroiled in a war of words with the opposition BJP.

Former health minister and now Chikkaballapur BJP MP Dr K Sudhakar has been reacting sharply to the commission’s findings, calling the report “politically motivated.” He claimed that the “vendetta politics” of the Congress government was palpable, in view of the fact that the investigation has been used as a cover for political vendetta rather than addressing a genuine grievance concerning pandemic management.

Chief Minister Siddaramaiah had during the Lok Sabha polls made statements that have added a political dimension to the matter. Siddaramaiah had claimed that there was enough evidence of corruption against Sudhakar. In fact, he had said that former health minister Sudhakar “will go to jail 100 percent”. The statements of the Chief Minister and findings of the commission have already added a political twist to the investigation process.

Not to be missed in the above narrative are the facts that first raised concerns over COVID-19 drug and equipment procurement were, in fact, brought to light by a Public Accounts Committee led by H K Patil at the time of the COVID pandemic. The more historical depth given to current investigation leads to an inference that things were indeed hazy even at the time the thing was unfolding as the pandemic unraveled.

What Could This Mean?

The Karnataka government’s response to the report of the Justice D’Cunha Commission is a landmark moment in state history as regards accountability in public expenditure. While it is on a very large scale, the alleged appropriation could be over a thousand crore rupees, which underscores why oversight mechanisms are paramount during moments of emergency.

While the investigation continues and the government follows up on its action plan, we have questions that might resonate with you –

Will the further investigation reveal even more malfeasance? How might this alter the aggregate sum of embezzled funds?

How will the government balance the need for accountability with the politically charged fallout from targeting prior officials?

How would the system be changed so that this type of thing would not happen again during a crisis?

The coming months, therefore, are critical. These will see the SIT start its work, a committee of top officials present their analysis, and the commission continuing its broader investigation. All the outputs from all these directions can have wide-ranging implications for Karnataka politics, public financial management practices, and the way the state responds to such a crisis.

Let’s see how this inquiry unfolds.