ED Raids Expose ₹1,000 Crore Sheep Distribution Scam in Telangana

Key Points

In July 2025, the Enforcement Directorate (ED) uncovered major financial irregularities in Telangana’s Sheep Rearing Development Scheme (SRDS), estimating losses to the state exchequer at over ₹1,000 crore. The findings followed raids across eight locations in Hyderabad on 30 July 2025, targeting properties linked to government officials, beneficiaries, and suspected middlemen.

Among those questioned was G. Kalyan Kumar, Officer on Special Duty (OSD) to former Animal Husbandry Minister Talasani Srinivasa Yadav. Kalyan is an accused in a corruption case filed earlier by the Anti Corruption Bureau (ACB), which first detected large-scale misuse of funds under the scheme. The ED subsequently took over the case under the Prevention of Money Laundering Act (PMLA).

Officials said the raids led to the seizure of documents, digital devices, and records revealing kickbacks and illegal fund transfers. “This was not just a case of irregular distribution. Evidence shows money was moved around through fake accounts,” an ED officer said. The agency found that public funds meant for livestock distribution were siphoned off through fictitious vendors and dummy bank accounts. Many individuals listed as beneficiaries had no prior involvement in sheep rearing or related businesses.

The ED also seized 31 mobile phones, 20 SIM cards, and banking materials linked to over 200 suspected mule accounts connected to an illegal online betting app. According to the investigation, several payments made under the scheme were routed through these accounts. Blank cheque books, passbooks, and debit cards were found at one of the premises, suggesting that the network was being used for money laundering and illegal transfers.

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The CAG’s audit report for the period ending March 2021 had already flagged extensive irregularities in the scheme. It found missing beneficiary details, duplicate tags on sheep, and payments against fake transport invoices. The audit, which covered only seven of Telangana’s 33 districts, pegged the losses at ₹253.93 crore. If extended statewide, the total could exceed ₹1,000 crore.

One ACB FIR also alleged that after a change in government, records related to the scheme were removed from a departmental office by breaking in. Another complaint by a sheep merchant accused departmental officials of diverting ₹2.1 crore meant for suppliers to unrelated accounts.

During the raids, the ED recovered materials indicating “illegal payments in the form of kickbacks to various government officials and others.” The agency is now tracing the full money trail to determine how public funds were circulated through shell entities and bogus beneficiaries.

“The scale of diversion suggests organised collusion between officials and private players,” an investigator said. The agency has also found evidence that some sheep units were recycled and re-tagged to fraudulently claim repeated payments.

The Sheep Rearing Development Scheme was introduced to support rural livestock farmers and self help groups. However, auditors and investigators say it was manipulated to generate fake records and channel government subsidies into private hands. [Rh]

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