According to the findings, the KKHRAC Society created what the report calls an ‘entirely illegal’ eighth entity named the ‘Sub-Region of Kalaburagi–Sedam
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A State-appointed inquiry has uncovered extensive financial and administrative irregularities in the Kalyana Karnataka Human Resource, Agriculture and Cultural (KKHRAC) Society, with the investigator describing the alleged mismanagement as one of the biggest misuse of funds in Karnataka in three-year period from 2020–21 to 2022–23.
The report, prepared by retired IAS officer Sudhir Kumar, was recently submitted to Chief Minister Siddaramaiah. (The Hindu has access to a certain portion of the report.)
Rural Development and Panchayat Raj and IT & BT Minister Priyank Kharge had repeatedly questioned the functioning of the KKHRAC Society and the alleged irregularities linked to it. The society was set up during the previous BJP government, with senior BJP leader and former Rajya Sabha member Basavaraj Patil Sedam as its president.
After the Congress returned to power in 2023, Mr. Kharge wrote to the Chief Minister seeking a formal investigation. The Chief Minister subsequently ordered the probe.
According to the findings, the KKHRAC Society created what the report calls an ‘entirely illegal’ eighth entity named the ‘Sub-Region of Kalaburagi–Sedam’. This sub-region was formed without the knowledge or permission of the State government and functioned as if it were an additional district under the Kalyana Karnataka region. The inquiry notes that Sedam Taluk and four neighbouring taluks were grouped and treated as a separate district for the purpose of planning and fund allocation, despite having no legal sanction.
It may be noted that Sedam is the home town of Mr. Sedam.
The report states that this unauthorised sub-region received unusually high allocations, at times even more than some of the seven legitimate districts of the Kalyana Karnataka region. Annual expenditure statements reviewed by the investigator show that financial flows to this sub-region consistently exceeded what some of the other districts received, raising questions about the rationale and the process through which the funds were diverted.
The report also notes that senior officers in the Planning and Finance Departments did not act to correct these irregularities even after discrepancies began to appear during 2021–22 and 2022–23.
Across the three years from 2020–21 to 2022–23, the society spent more than ₹322 crore out of the total funds available. This figure includes the roughly ₹300 crore released by the government as grants as well as the bank interest earned on those grants. The annexures reviewed by the investigator show that expenditure in Sedam Taluk and the four taluks grouped with it was unusually high across all three financial years under scrutiny. In 2020–21, spending in this cluster was already higher than in Bidar, Ballari and Vijayanagar, and only slightly lower than the levels recorded in Koppal.
The pattern held in 2021–22, when expenditure in these five taluks exceeded that of Bidar, Koppal, Ballari and Vijayanagar, and came close to the amounts spent in Yadgir and Raichur. In 2022–23, although the amount spent in the sub-region was lower than in the previous two years, it still surpassed half of the individual expenditure recorded in Yadgir, Raichur, Ballari and Vijayanagar.
The inquiry also draws attention to the way the society used a spending head labelled ‘President’s Discretion’, under which more than ₹25.85 crore was spent across the three financial years examined. A substantial share of this amount was directed to Sedam Taluk, reinforcing the investigator’s view that funds were being channelled in a pattern that favoured the area carved out as the unauthorised sub-region.
The report recommends that the State government initiate disciplinary and criminal proceedings against the officials who took part in the alleged diversion of funds. It also suggests that action be considered against private individuals, non-officials and retired government employees who were associated with the society and may have played roles in the process.
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Published – December 12, 2025 07:19 pm IST
