Along with Mr Kushwaha, his close aide RP Jaiswal, a BSP MLA from Deoria, was also arrested, taking the number of people arrested in the case to eight.
"They have not given us any information about how much money and various other details. They want him to be in remand for 14 days so that they can get all the details. Our next move would to obtain his bail," said SK Jain, Mr Kushwaha's lawyer.
Mr Kushwaha, a former Bahujan Samaj Party (BSP) minister, had joined the Bharatiya Janata Party (BJP) just before the UP polls.
Soon after the first political arrests in the case, both the Congress and the BJP lashed out at each other. While the Congress said even though the arrests were expected, it was 'unfortunate' that the BJP used Mr Kushwaha through the election campaign it was arrested. The BJP, reacting to the arrests, slammed both the Congress party and the CBI.
"BJP always believed that CBI is Congress bureau of intelligence. No action is being taken against Mayawati in the NRHM scam. BJP wants deep probe into the issue. NRHM chief and conspirators should be inquired about the same," said BJP leader JP NADDA.
The Congress, however, said this was not a 'political' arrest and it was expected.
"The law is taking its course. This arrest is not a political arrest, it has been done on the basis of corruption. The most unfortunate thing is that throughout the elections, the BJP has used him even though it knew what kind of accusations and FIRs existed against him," said Congress spokesperson Rashid Alvi.
Rita Bahuguna Joshi, President, of the state Congress said, "A CBI enquiry is going on. This was anticipated being the kind of scam is was and the fact that 6 people have lost their lives due to this. Very clearly he is involved in this and the law will take its due course. This is one of the biggest scams we have seen. The money that was to be given to the poor was misused or abused by corrupt practices. Everyone involved should be punished."
In 2005, the UPA government launched the National Rural Health Mission Scheme. Huge amounts of money were to be sent to states to provide accessible and affordable health care to the poorest families in remote regions. The government's auditor has said that more than half of 8500 crores sent by the Centre to UP (from 2005 to 2011) have been embezzled.
The large scale bungling in the centrally funded programme involved not only heavy over-invoicing, but even fake supply of medicines and hospital equipment by fictitious firms as well as huge kickbacks in construction activity undertaken with a view to improving the available health services in government-run primary health centres in rural areas.
The scam saw corrupt bureaucrats and politicians siphoning away crores meant to improve health facilities. It was birthed in the Family Welfare department in Mayawati's government, which handled the huge funds sent by the Centre for the NRHM Scheme. Mr Kushwaha was sacked by Mayawati in April last year after the murders of three chief medical officers forced the government to acknowledge the deep-rooted graft in his department.
Two senior doctors affiliated to the department were murdered; another was found dead in a Lucknow jail in mysterious circumstances. In January, an officer with the UP Jal Nigam committed suicide allegedly because he was being investigated for his role in the scam.
The Allahabad High Court has ordered the CBI to investigate the trio of deaths and the swindle entrenched in the department. Chief Minister Mayawati has, however, described the investigation into the swindle, and its findings, as a political conspiracy against her.