CBI has arrested three more persons, including two bureaucrats and a trader, in connection with alleged irregularities in utilisation of funds allocated under the National Rural Health Mission (NRHM).

While former Uttar Pradesh small industries corporation managing director Abhay Kumar Bajpai was arrested last night, former director general, family welfare, S P Ram and trader Saurabh Jain were arrested this morning, sources said in New Delhi.

The three were called for questioning after the agency carried out inter-state searches at about 60 locations on January 4, including at the residence of former Uttar Pradesh minister Babu Singh Kushwaha, to probe alleged irregularities.

The agency had registered five cases on January 2 against certain government and private sector officials, including one against Kushwaha alleging loss of about Rs 28 crore in implementing the centrally-sponsored scheme meant for 72 districts of Uttar Pradesh.

Kushwaha, a BSP OBC leader of the state, was sacked by Mayawati following his alleged involvement in the multi-crore scam.

NRHM funds to the tune of about Rs 10,000 crore were allocated to Uttar Pradesh for the period 2005-06 till date by the union health and family welfare ministry.

The agency has already arrested former Uttar Pradesh Jal Board general manager P K Jain on Thursday in this connection.

The CBI had registered a case against Jain on January 2 for allegedly causing a loss of Rs 5.46 crore in the upgrading work of 134 district hospitals.

The agency has alleged that Rs 13.4 crore was given to Construction and Design Services, a unit of UP Jal Nigam, for the upgrade work of 134 districts hospitals.

It alleged that the work was sub-let to a Ghaziabad-based firm on the basis of bogus and forged documents.

"The materials installed in the hospitals were found to be of inferior and sub-standard quality thereby causing an approximate loss of Rs 5.46 crore to the exchequer," the CBI alleged.

It claimed to have recovered three kgs of gold and cash of Rs 1.10 crore besides some important documents during search operations at Jain's residence on Thursday.