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Home News Reports Andhra Pradesh: Vigilance Department unearths Rs 404 crore scam in ESI scheme, three Insurance...

Andhra Pradesh: Vigilance Department unearths Rs 404 crore scam in ESI scheme, three Insurance Medical Service directors named

The alleged scam was facilitated by the trio by keeping bills from rate-contract firms pending since 2012 and by diverting funds from the allocated budget to the non-rate contract firms.

A scam has been unearthed in the Employees’ State Insurance (ESI) in Andhra Pradesh by the Vigilance and Enforcement Department. According to reports, Three directors of the Insurance Medical Service (IMS) in Andra Pradesh purchased medical equipment without inviting open tenders and constituting Drug Procurement Committee, thereby leading to a ₹404.86 crore scam. They have been identified as Dr. B Ravi Kumar, Dr. CK Ramesh Kumar, and Dr. G Vijaya Kumar by the Vigilance and Enforcement Department.

The directors were given the charge of implementing the Employees’ State Insurance (ESI) scheme in the State. The Department had issued a notice seeking action against the trio for forgery, breach of trust and criminal misconduct. Charges have also been filed against companies involved in the alleged scam between 2014-2015 and 2018-2019.

The alleged scam was facilitated by the trio by keeping bills from rate-contract firms pending since 2012 and by diverting funds from the allocated budget to the non-rate contract firms. Despite the budget allocation of ₹293.51 crores, the directors spent ₹698.36 crores on medical supplies.

By purchasing drugs from non-rate contract firms, the exchequer suffered a loss. The directors paid 36% in excess while procuring lab kits worth 237 crores from non-contract firms such as Legend Enterprises, Avantor Performances India Private Limited, and Omni Medi.

The investigation had also revealed that surgical items worth Rs 47.77 crore were purchased without inviting open tenders. Furniture was also purchased at a 70% higher rate than the market price. Quotations were found to be fabricated. Comparision with market prices issued by ESI revealed an additional expenditure of ₹10.43 crores on syringes, thermometers, trolleys for ECG machines and so on.

This is not the first case of an alleged scam that has come to light from the State of Andhra Pradesh in recent times. In November last year, the governor of Andhra Pradesh Biswabhusan Harichandan had ordered an investigation into the alleged ‘job scam’ that was supposedly done by an outsourcing agency on the claim of offering jobs in Raj Bhavan.

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