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Kerala Model of Massive Covid-19 scam exposed by CAG: Read how the left government overpaid for items like PPE kits and masks

The CAG report stated that the Kerala government gave undue favours to San Pharma company by purchasing PPE kits from it at up to 300% higher rates.

A report by the Comptroller and Auditor General of India (CAG) has flagged some serious irregularities of the Kerala government regarding purchasing Personal Protective Equipment (PPE) kits, N95 masks, and other essential commodities during the COVID-19 pandemic. The CAG report entitled ‘Performance Audit of Public Health Infrastructure and Management of Health Services’ for the period between 2016 and 2022 was presented in the state assembly on Tuesday.

The report highlighted various flaws in the state’s health infrastructure, including shortage of manpower, poor infrastructure, inadequate supply of drugs, and a lack of minimum essential services as prescribed by Indian Public Health Standards (IPHS) in the state’s health sector.

The Kerala government chose vendors selling at up to 300% higher rates

As per the CAG report, the Vijayan-led government in Kerala refused to purchase the PPE kits from a firm that was supplying the kits at a lower rate and instead purchased the kits from a vendor that was selling the kits at much higher rates. This was done despite the state government order that fixed a rate of Rs. 545 per unit of PPE kit to regulate the market prices during the pandemic. The state government allowed special sanctions to the Kerala Medical Services Corporation Ltd. (KMPSCL) to procure PPE kits, N95 masks, and other essential medical equipment.

Notably, for no apparent reason, the KMPSCL reduced its purchase order from 25,000 units to 10,000 units from the firm offering the base rate and increased orders from 15,000 to 2 lakh units from the vendors charging up to 300% more than the standard rate. The audit report found that the Kerala government’s decision to prefer companies offering inflated rates over companies offering base rates led to an additional expenditure of Rs. 10.23 crore. As per the CAG report, on March 28, 2020, the Kerala government purchased PPE kits for Rs. 550 per unit, and just two days later it purchased the kits at Rs. 1550 per piece.

“Although the procurement was made during an emergency, this does not justify cancelling orders that were more economical for the government. The purchases made from new suppliers at much higher rates resulted in additional expenditure of Rs. 10.23 crore,” the report said. The report alleged that the Kerala government gave undue favours to San Pharma Company. The KMPSCL made a full advance payment to San Pharma, which was selling at Rs. 1550 per unit, violating the authorised limits set by the State Level Crisis Management Group (SLCMG). Besides, the KMPSCL made the full advance payment without even verifying the quality of the kits.

Unsatisfactory implementation of centrally sponsored schemes

The centrally sponsored schemes were not properly implemented by the LDF (Left Democratic Front) government in the state as per the CAG report. “Under the Pradhan Mantri Jan Arogya Yojana (PMJAY), inordinate delay in the payment of insurance claims of beneficiaries was noticed. A District Implementation Unit to support the implementation of PMJAY and a combined unit for anti-fraud, medical audit, and vigilance at the state level with district-level officers were not formed. The number of beneficiaries covered under Janani Suraksha Yojana and Janani Shishu Suraksha Yojana Karyakram was low,” the report stated. The basic patient amenities like seating facilities, toilets, drinking water, ramps, etc. were not taken care of in district and taluk hospitals. The report also pointed out a shortage of staff, including doctors, nurses, pharmacists, and lab technicians, against sanctioned posts in the hospitals.

The report found the doctor-to-population ratio to be most adverse in 2 out of the 14 districts in Kerala. In 13 districts, the shortage of accredited social health activists ranged from 3 to 33 per cent.

Opposition hits out at the state government

VD Satheesan, the leader of the Opposition from Congress, slammed the Kerala government after the findings of the CAG report. He accused the government of being involved in corruption. He said that the state government saw the COVID-19 pandemic as a ‘golden opportunity to fill its own pockets beyond saving the lives of the people’. “The report tabled by the CAG confirms all the allegations raised by the opposition regarding corruption during the COVID-19 pandemic,” alleged Satheesan. He accused CM Vijayan and former Health Minister KK Shailaja of being complicit in the corruption. “The corruption took place with the knowledge of the Chief Minister and former Health Minister KK Shailaja. The first Pinarayi Vijayan government carried out this massive looting during the pandemic when people were living in uncertainty,” he said.

KK Shailaja defends the state government

Former Health Minister of Kerala KK Shailaja dismissed the allegations regarding the purchase of PPE kits in the CAG report saying that the PPE kits had to be bought at higher prices due to shortage. “When there was a shortage of PPE kits, the prices increased. Then, a few kits had to be bought at a higher price. Although lakhs of kits were purchased, only a few were bought at inflated prices. The extraordinary time called for such a decision,” she claimed.

Responding to the allegations of the opposition, she said that the issue was raised several times by the Congress-led UDF in the assembly and a clear answer was given. Therefore, the issue need not be raised ‘repeatedly’.

During the pandemic, the Kerala government was also accused of violating the privacy of people under quarantine. The Communist-led government allegedly collected the personal information of 1.75 lakh people of the state under quarantine, including details of their symptoms and health conditions. The data was compiled by the grassroots-level workers of the state and was transferred to a private company – Sprinklr. 

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