Ramesh Chennithala accuses LDF of ₹700 cr scam in Kerala cooperative software project

Senior Congress leader Ramesh Chennithala on Friday levelled serious allegations against the LDF government, claiming a ₹700 crore scam linked to the procurement of software for thousands of primary cooperative societies in Kerala.

Speaking at a press conference, Chennithala said the contract to supply software to nearly 4,415 primary cooperative societies was initially awarded to Tata Consultancy Services, with an agreement valued at ₹206 crore signed with the firm.

He alleged that the contract was later scrapped under questionable circumstances, following which a new tender was issued with criteria that effectively excluded TCS from participating. As per the revised conditions, only two firms based in Kannur were eligible, both of which he claimed were under the control of the CPM.

Chennithala further alleged that one of these firms, Dinesh Beedi Cooperative Society, had quoted ₹58 crore and was likely to secure the contract despite lacking relevant experience in the sector.

According to him, the cost of implementing software for more than 4,400 societies has now escalated to around ₹915 crore, compared to the earlier ₹206 crore quoted by TCS, leading to an estimated loss of nearly ₹700 crore to the public exchequer.

He added that all steps to finalise the contract have been completed and that the government is now awaiting clearance from the Election Commission to move forward.

Explaining the background of the project, Chennithala said that under the Reserve Bank of India guidelines issued in 2014, a centralised banking software system was to be rolled out nationwide.

"It is being carried out by states using central funds," he said. However, he noted that the Kerala government opted against adopting the Centre’s software, citing the need to enhance the functioning of primary cooperative societies, and instead chose to build its own system.

He said the government later floated a tender in which TCS emerged as the sole bidder and was selected in 2021, with the agreement eventually signed in 2024. The contract was subsequently cancelled, and a fresh tender was issued in 2025, he added.