The CAG’s findings, limited to seven districts, prompted the ED to estimate that the scam’s total scale across all 33 districts could exceed ₹1,000 crore, a figure corroborated by ongoing investigations.
Published Aug 02, 2025 | 2:24 PM ⚊ Updated Aug 02, 2025 | 2:24 PM
ED raids rock Hyderabad in multi crore Sheep distribution scam probe linked to former BRS government (@Collector_PDPL on X)
Synopsis: The Telangana Sheep Rearing Scheme scam under the previous BRS government has ballooned into a ₹1,000 crore scandal. The ED uncovered massive fund diversion, fake beneficiaries, and mule accounts linked to illegal betting. Former minister Talasani Srinivas Yadav is under scrutiny. Originally meant to uplift shepherd communities, the scheme was exploited, triggering political fallout ahead of local elections.
The scale of corruption in the implementation of the Sheep Rearing Development Scheme (SRDS) under the watch of the previous BRS government is sending shock waves across the state. The Enforcement Directorate (ED) said the scam’s size is now estimated to be ₹1,000 crore.
With ED’s revelation, the scam now assumes all the trappings of the mother of all scams in the animal husbandry department of the previous government.
Armed with the evidence it now has in its hands, the ED has fast-tracked its investigation.
In an official release on 1 August, the ED said that substantial funds were transferred to the bank accounts of several persons and entities towards payment in lieu of supply of sheep for beneficiaries under SRDS.
The investigation agency, however, said prior to the launch of SRDS, these beneficiaries were not involved in the business of sale or supply of sheep. This apart, the investigation also indicated that no sale or purchase of sheep was ever done by these recipients of funds.
The ED also added that the government funds were illegally diverted to bank accounts of bogus vendors. It said payments were made to fictitious vendors and there was evidence of recycling of sheep units, ostensibly to fraudulently claim disbursements from Government funds without actual supply of sheep units.
In its search operations, the ED had seized incriminating material evidencing transactions indicating illegal payments in the form of kickbacks to various Government officials and others.
This apart, documents pertaining to numerous bank accounts, including blank cheque books, passbooks and debit cards associated with over 200 suspected dummy and mule accounts linked to an illegal online betting application, were recovered from one of the premises.
Searches also led to the seizure of 31 used mobile phones and over 20 SIM cards, which are suspected to have been utilized in the operation of the illegal activities.
In June 2024, the ED registered a money laundering case under the Prevention of Money Laundering Act (PMLA) and made a deep dive. It probed the role of officials and private parties involved in the scam.
According to sources, the ED might summon former Animal Husbandry Minister Talasani Srinivas Yadav.
Recent raids on 30 July, 2025, in Hyderabad have exposed a web of fraudulent practices, including fake beneficiaries, forged invoices, over 200 “mule” bank accounts linked to an illegal betting app, and funds diverted to entities with no history in livestock trade.
The raids were conducted at eight Hyderabad locations, including the residence of G Kalyan Kumar, former Officer on Special Duty (OSD) to then-Animal Husbandry Minister Talasani Srinivasa Yadav, and and properties linked to suspected middlemen and beneficiaries.
The involvement of G Kalyan Kumar, has brought the BRS leadership under the scanner. The ED is likely to summon Talasani, now Sanatnagar MLA, to clarify his role, as questions mount over why the scam flourished under his watch.
The ED apparently based its assessment on a Comptroller and Auditor General (CAG) audit that flagged ₹253.93 crore in losses across seven of Telangana’s 33 districts.
Launched in April 2017 by the BRS government under former Chief Minister K Chandrashekar Rao, the SRDS aimed to empower traditional shepherd communities, particularly the Golla and Kuruma castes. It was aimed at providing sustainable livelihoods through sheep rearing. The scheme offered units of 20 sheep and one ram at a 75 percent subsidy, with beneficiaries contributing the remaining 25 percent.
Official records from the Telangana State Sheep and Goat Development Cooperative Federation Ltd (TSGDCFL) indicate that by December 2021, 3.88 lakh sheep units were distributed, involving a subsidy outlay of ₹3,385.32 crore.
Over 1.28 crore sheep were reportedly procured, many from neighbouring states like Andhra Pradesh and Karnataka, and distributed to approximately 3.92 lakh beneficiaries through Primary Sheep Breeders Co-operative Societies.
The initiative was touted as a game-changer for rural economies, aiming to support over 7.3 lakh shepherd families. However, investigations have revealed that the scheme was systematically exploited, with funds diverted through fictitious beneficiaries, fake vendors, and fraudulent accounts, undermining its noble intent.
A CAG audit for the period ending March 2021, covering seven of Telangana’s 33 districts, uncovered glaring irregularities amounting to ₹253.93 crore in losses. The audit highlighted a litany of fraudulent practices, including non-maintenance of beneficiary records with no proper documentation existing to verify who received the sheep units.
The other practices were making payments against fake or non-commercial vehicle registration numbers, with absurd claims such as 126 sheep transported on a two-wheeler in Bhongir, 168 sheep in a cab in Mahbubnagar, and 84 sheep in an ambulance in Khammam.
Also, sheep units were allotted to deceased or non-existent individuals, with sanction orders issued 14 to 36 months after beneficiaries’ deaths, as verified by cross-referencing with the Rythu Bima insurance scheme.
The CAG’s findings, limited to seven districts, prompted the ED to estimate that the scam’s total scale across all 33 districts could exceed ₹1,000 crore, a figure corroborated by ongoing investigations.
The Telangana Anti-Corruption Bureau (ACB) began probing the scam in December 2023, shortly after the Congress government assumed power.
Initial complaints, including one from a sheep merchant alleging misappropriation of ₹2.1 crore owed for supplied sheep units, led to FIRs against two contractors and two assistant directors of the Animal Husbandry Department.
The ACB’s investigation, launched in January 2024, opened a can of worms and the estimate of the scam appeared to be of about ₹ 700 crore, a significant jump from the initial ₹2.1 crore figure.
Key arrests included Sabavath Ramachander, former CEO of the Telangana State Livestock Development Agency and former Managing Director of TSGDCFL, and G Kalyan Kumar, OSD to Talasani Srinivasa Yadav.
In one FIR, it was alleged that Kalyan Kumar unlawfully removed departmental records by breaking into the office after the BRS lost power in 2023, suggesting an attempt to conceal evidence. Another FIR, filed by a sheep merchant, claimed that assistant directors diverted ₹2.1 crore meant for suppliers to unrelated accounts.
By January 2024, the ACB had arrested 17 individuals, including middlemen like Moinuddin, who allegedly facilitated the fraud by exploiting connections within the Animal Husbandry Department.
Critics argue that the scale of the fraud—spanning fake beneficiaries, forged invoices, and illicit fund transfers—suggests either gross negligence or complicity at senior levels. Kalyan’s alleged break-in to remove records post-2023 election further fuels suspicions of a cover-up.
As the scam unfolds, it is feared that it would have political fallout. The Congress government, led by Chief Minister A. Revanth Reddy, has already begun leveraging the scandal to paint the previous BRS government with a corruption brush. The ED’s findings, however, point to a coordinated effort to divert public funds meant for rural upliftment.
The CAG’s revelations of 860 deceased beneficiaries receiving sheep units, coupled with the ED’s discovery of mule accounts linked to illegal betting, are seen as indicative of a sophisticated and well-coordinated web of fraud. The seizure of 31 mobile phones and 20 SIM cards suggests the use of technology to orchestrate the scam, possibly involving cybercrime elements.
The Telangana sheep scam, initially pegged at ₹2.1 crore, has ballooned into a ₹1,000 crore scandal. It could not have come at a worse time when the BRS is navigating political challenges in the electoral arena. The scam may tarnish the image of the BRS, which is girding its loins for the local body elections.
(Edited by Sumavarsha)
