The Telangana Crime Investigation Department has arrested seven rice millers in Mulugu district for allegedly diverting government-procured fine-variety paddy to the open market and supplying cheaper coarse rice to the Food Corporation of India instead, with the alleged irregularities causing an estimated ₹67 lakh loss to the government.
The arrests were made on October 25, according to CID officials and the remand report submitted to the Mulugu court. The accused have been identified as Malyala Praveen Kumar, Yalagandula Mohan, Lanka Potharaju, Akkala Raghotham, Badam Anil Kumar, Badam Praveen Kumar and Komuravelli Harinath. Two other accused persons are absconding, CID DSP Vasam Sampath and Additional ASP Jitender said.
The case relates to the Custom Milled Rice system, under which 25 mills in Mulugu district were permitted to convert Grade-A paddy into common-variety paddy during the 2025–26 Kharif season after paying a price difference of ₹34.21 per quintal. The arrangement required the mills to supply rice processed from the fine-variety paddy allocated to them.
According to the CID remand report, inspections found that six mills had supplied coarse rice to the FCI instead of the stipulated fine-variety rice. The mills named in the report are Sri Mata Agro Tech in Abbapur, Lepakshi Industries in Mulugu, LSR Modern Binny Rice Mill in Pasra, Sairam Industries in Singarakuntapalli, Sri Badam Industries in Abbapur and Vaishnavi Industries in Mulugu.
The six mills allegedly supplied 1,340.929 metric tonnes of coarse rice to the FCI. Investigators have alleged that the millers sold the fine-variety paddy in the open market, bought cheaper coarse rice from other regions and supplied it to the central food agency. The preliminary assessment places the loss through bonus payments at approximately ₹67 lakh.
The alleged irregularities have also raised questions about oversight of the paddy allocation and custom-milling process. The CID remand report has called for further investigation into the possible involvement of officials from the Civil Supplies Department and other persons. The report estimates that similar irregularities across Telangana may have caused losses of approximately ₹242 crore to the state government.
The CID has registered a case under provisions relating to cheating, criminal breach of trust and conspiracy, along with relevant sections of the Essential Commodities Act. The arrests and allegations remain subject to the investigation and judicial process. The Mulugu court will consider the CID’s request for judicial custody as the investigation continues.
