Telangana’s vigilance and enforcement department has detected the diversion of 8.73 lakh metric tonnes of paddy worth Rs 2,200 crore from stocks meant for custom milling and government auctions, after raids on nearly 300 rice mills across 26 districts since mid-July. Officials said Rs 1,500 crore had been recovered from millers against the detected shortfall and 25 people, mostly rice millers, had been arrested.
More than 4 lakh metric tonnes of the diverted stock was allocated for custom milling rice, while the remaining quantity was earmarked for auctions, according to officials quoted by Deccan Chronicle. The investigation is examining shortages linked to both systems and the alleged illegal sale of government-held paddy.
A senior official told the newspaper that the department had found a deficit valued at Rs 2,200 crore and recovered Rs 1,500 crore from millers. The arrests were made under provisions of the Essential Commodities Act and the Bharatiya Nyaya Sanhita relating to criminal breach of trust.
Suryapet recorded the highest value of diverted paddy stocks at Rs 430 crore, followed by Nizamabad at Rs 245 crore and Nirmal at Rs 230 crore. Vigilance officials said millers in these districts had illegally sold paddy stocks allocated to them.
Under the custom milling rice system, the State Civil Supplies Corporation procures paddy from farmers at the minimum support price and allocates it to empanelled private rice mills. The mills are required to process the paddy and return a specified proportion as rice to the Food Corporation of India or state civil-supplies godowns for distribution through the public distribution system.
Paddy auctions are conducted through online bidding to dispose of stocks, recover government funds and clear excess inventory. The findings from the raids included shortages in physical verification, improper stock registration, poor storage that caused deterioration and instances where allocations allegedly exceeded requirements. Officials also identified delays in recovering dues from millers.
The investigation pointed to monitoring failures within the civil supplies department. A vigilance official said periodic inspections could have helped prevent pilferage and added that recovering outstanding dues from millers remained a major challenge. The department’s findings also included alleged misuse of paddy allocations and inadequate oversight of stocks held at private mills.
The enforcement action has also extended to rice traders in Hyderabad and Ranga Reddy districts. Following concerns about artificial scarcity and price manipulation, the civil supplies department, Enforcement Task Force and legal metrology department conducted surprise inspections at retail and wholesale establishments.
Between October 29 and 31, the civil supplies department registered 11 first information reports and initiated legal action against 18 trading establishments. The inspections found 25-kg rice bags carrying labels indicating 26 kg, as well as higher price stickers pasted over manufacturers’ original printed rates. Several establishments were allegedly operating without mandatory trade, GST, labour or Food Safety and Standards Authority of India licences.
Officials also detected the diversion and hoarding of rice meant for the public distribution system. Enforcement teams photographed and videographed the violations to support legal proceedings. The cases were registered at Saroornagar, Jeedimetla and Alwal police stations against repeat offenders, who face prosecution under the Essential Commodities Act and relevant provisions of the Bharatiya Nyaya Sanhita, including possible imprisonment of up to seven years.
The vigilance investigation and legal action remain ongoing, with authorities continuing efforts to recover outstanding amounts and determine responsibility for the stock shortages and monitoring lapses.
