July 17, 2026

'Cut Money' Surfaces In Karnataka

By Sunil Garodia
First publised on 2022-04-15 08:30:05

About the Author

Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Author of Cyber Scams in India, Digital Arrest, The Money Trap and The Human Hack

View all posts by this Author

In the last elections in West Bengal, 'cut money' was a big campaign issue. The BJP accused the ruling TMC of having a syndicate of party workers in every field to collect cut money, or commission, from civil contractors and others who were carrying out project work and even from beneficiaries of government schemes. Now the same cut money has come back to haunt the BJP in Karnataka, a state where it is in power. (Karnataka had witnessed another, albeit different, 'cut money' scandal in 2021 when Congress leader DK Shivakuma was accused of demanding the same from party leaders).

In the instant case, a civil contractor committed suicide in Karnataka after payment for work done by him was not released by the government. He named K S Eshwarappa, the state minister for rural development and panchayati raj, for forcing him to take the extreme step. It is being speculated that the payment was not being released as the contractor was being asked to make an upfront commission payment. After refusing to step down initially, Eshwarappa has now rightly decided to resign till the inquiry is over.

Despite Prime Minister Modi's sustained campaign against corruption, it is a fact that at the state level, paying cut money or commission is the rule for government contracts. This is true for BJP-ruled states too. In fact, after the implementation of GST and other digital processes, the ground reality is that the rate of commission has increased in such cases.

There is no doubt that the Centre is trying to stop the leakages by going in for e-procurement and making the tender process online and transparent. But as the Karnataka case shows, some politicians and a section of the bureaucracy have found ways to subvert the process and bypass restrictions to make illegal gains in collaboration with some contractors.

This has been going on in almost all states. The government has to study the way the process is subverted by the use of discretionary powers by the top bureaucracy, in collusion with some politicians. It will also have to study how the spoils are shared, with allegations that a part of the money also goes to the fund of the party ruling in the state. The response to this will have to be by way of strengthening institutions and further refining processes. There must be red flags that need to pop up the moment something is done out of the way and questions must immediately be asked for the reason of taking the undesired step. The casual approach in tackling breaking of rules cannot be accepted.