Indore Minority Scholarship Scam: Ghost Madrasas, Forged Students, and ₹57 Lakh Embezzlement

In a disturbing revelation, the Indore Crime Branch has uncovered a large-scale embezzlement of minority scholarship funds involving fake madrasas and private schools. At the heart of the scandal lies a network of 27 institutions—many of which exist only on paper—that collectively siphoned off over ₹57 lakh by falsely claiming government-funded minority scholarships. The case has now snowballed into a wider probe, prompting serious questions about the integrity and oversight of welfare schemes for minority communities.

The scholarship scam has triggered a political row | NDTV

The Modus Operandi: Fake Schools, Non-Existent Students

The investigation began when the Crime Branch attempted to physically verify schools that had received large sums under the minority scholarship scheme. What they found shocked the authorities. Several of the listed schools were either completely non-existent or were operating on abandoned or vacant plots.

For instance, when officers visited the supposed premises of “St. Xavier’s Convent School” in Sabzi Mandi Khajrana—allegedly run by an accused named Aftab Khan—they found no trace of any such institution. Despite claims of more than ₹7 lakh being disbursed to students from that school, no infrastructure or student activity was visible. Aftab, whose contact details were listed in the records, switched off his phone and went missing soon after the visit.

The Accused and Legal Action

An FIR has been registered against five key individuals involved in this fraudulent operation: Mohammad Rafiq Khan, Shabnam Shah, Shahnaz Khanam, Aftab Khan, and another individual also named Aftab. These individuals are linked to institutions such as Care Well School, Madrasa Safia, Madrasa Usmania, St. Xavier’s Convent, and JR DRD Memorial School. Authorities allege that they used legitimate-looking login credentials to register fake students and funnel government money into their own accounts. A detailed report has been sent to the state government, and a manhunt is underway to locate those who have gone underground.

The Bigger Picture: Scholarship Scams Across India

This case is not an isolated incident. Across various states in India, similar patterns of fraud have emerged, revealing systemic loopholes that are repeatedly exploited.

In Bhopal, over 40 madrasas and minority institutions are under investigation for a nearly identical fraud involving ₹57–₹58 lakh. These schools were found to have listed ineligible students or claimed scholarship funds for classes beyond the institution's approved limits. In Bengaluru, authorities recently unearthed a ₹1.35 crore scam where 643 fake student entries were used to manipulate the National Scholarship Portal. Jaipur police arrested three individuals who cloned biometric IDs and forged documents to claim ₹23 lakh in scholarships. In Uttar Pradesh, multiple cases—including a ₹2.74 crore scam in Hathras and a ₹57.53 lakh embezzlement in Lucknow—are under active investigation.

In Khargone, Madhya Pradesh, officials from the Minority Welfare Department allegedly created around 80 fake accounts to siphon off ₹84 lakh between 2021 and 2023. These recurring scams highlight a coordinated effort by individuals and institutions to exploit weak monitoring mechanisms for personal gain.

Digital Reforms and Their Limitations

To curb such malpractices, the Indian government launched the National Scholarship Portal (NSP) under the Digital India initiative in 2016. It was envisioned as a unified system for applying and distributing scholarships to students across various categories, particularly SC/ST, OBC, and minority communities. While the NSP has improved transparency and accessibility to some extent, the recurring frauds show that even digital systems are vulnerable when verification and audit mechanisms are weak or poorly implemented.

Many of these scams were executed by creating fake student IDs, forging documents, and in some cases, colluding with officials who overlooked basic verification procedures. In several instances, biometric authentication was bypassed through cloned data, and fake institutions were able to operate within the portal by submitting fabricated approvals.

Public Reaction and Need for Accountability

The revelation has triggered widespread outrage in Madhya Pradesh and beyond. Taxpayer money, meant to uplift underprivileged and minority students, has instead been pocketed by opportunistic fraudsters hiding behind religious or educational institutions. The misuse of welfare schemes not only robs genuine beneficiaries of their rights but also undermines public trust in the system.

Activists and education experts are calling for a complete audit of all scholarship disbursements over the last five years, especially those channeled through madrasas and private institutions. Some are demanding CBI-level probes in states like Madhya Pradesh and Karnataka where multiple scams have come to light.

Conclusion: A Wake-Up Call for Systemic Reform

The Indore scam is a grim reminder of how even well-intentioned welfare schemes can be turned into conduits for corruption when proper checks are not in place. It exposes the urgent need for systemic reform, tighter digital surveillance, and robust cross-verification mechanisms for both institutions and students. The government must act swiftly—not just to punish the guilty—but to overhaul the infrastructure of scholarship disbursals so that the trust of the public and the future of deserving students are safeguarded.

Until then, the cycle of ghost schools and ghost students may continue to haunt India’s education welfare system.

(Sources: OpIndia, NDTV, India Today)