New Delhi, Jan. 5: The Orissa government today told the Supreme Court that there had been no misuse or diversion of NREGA funds earmarked for the state. The state, however, said it was not averse to any inquiry by the CBI or any other agency to prove its case.

The state government said that it had initiated vigilance inquiries wherever such cases had come to light.

In an affidavit filed today through counsel Suresh Tripathy, the state government said that the allegations made by an NGO in a PIL that these funds were being misused and siphoned off were baseless.

The state admitted that funds had been diverted for emergency purposes in some instances, but these were recouped and handed back to be used for the NREGA scheme. The state claimed that it had initiated vigilance inquiries against 11 subordinate officials. It also denied claims that most workers registered in the log-books were bogus.

The state government said that it was treating all central guidelines on ways and means to implement the rural employment scheme as “mandatory”. The SC had asked the state to explain whether it was strictly adhering to the Centre’s instructions issued from time to time to states on NREGA.

The court, on December 17, 2010, issued showcause notices to the Centre and the state asking them to explain why it should not direct a CBI probe into the alleged non-implementation of NREGA and the diversion of funds allocated for it. The court was acting on a PIL filed by the Centre for Environment and Food Security. The NGO alleged that the funds were being siphoned by corrupt officials, thereby, denying lakhs of poor people their fundamental right to livelihood.

At the last hearing, a three-judge bench, headed by CJI S.H. Kapadia, said that the court would take the state as a test case as the state was accused of maximum violations and complete non-adherence to law.

The court had also sought to know why the central guidelines issued in 2008 should not be made mandatory for the state. The court was dissatisfied with the state’s response to the allegations.

The state had claimed that 799 lakhs of person-days had created assets such as tanks, roads, plantations, forestry and many more. It had denied allegations of partial wage payment, discrepancy in the number of working days recorded in the job cards vis-à-vis the number of actual work days provided to workers.

It had claimed that in 2006-07 a sum of Rs 890 crores was allocated and Rs 733 crores was utilised. It had denied that any amount had been misappropriated from it.

Two affidavits filed by the state did not statistically deny the allegations, the court noted.

“To us, from the record available, it appears that all is not well in the state of Orissa with regard to implementation of the scheme…,” it said.

Rapping the Centre then, the court said that it had claimed to be “releasing funds to Orissa for purposeful implementation of the schemes, but has miserably failed to exercise its supervisory and investigative powers”.

The court had then issued several directions for strict compliance by the state and the Centre.