Telangana CID busts rice diversion racket, 14 millers held

The alleged irregularities involve the diversion of Sanna Rakam paddy allotted to rice mills to the open market and its substitution with cheaper coarse rice.

Hyderabad: The Telangana Crime Investigation Department (CID) has registered three criminal cases into alleged irregularities in the delivery of Sanna Rakam rice to the Food Corporation of India (FCI) during the Kharif 2025–26 season, with 14 rice millers arrested so far.

According to the CID, the investigation followed a complaint lodged by the General Manager (Procurement) of the Telangana State Civil Supplies Corporation on Saturday, October 24.

The alleged irregularities involve the diversion of Sanna Rakam paddy allotted to rice mills to the open market and its substitution with cheaper coarse rice, including rice allegedly sourced from outside Telangana.

The State government procured 71.86 lakh metric tonnes of paddy during the Kharif season against a target of 59.60 lakh metric tonnes of rice for delivery to the FCI. Inspections by Enforcement and Task Force (ETF) teams, followed by laboratory analysis, reportedly found that samples supplied did not conform to the Sanna Rakam variety specified in the allotments.

In Nizamabad, Karimnagar and Mulugu districts, 16 rice mills allegedly delivered 3,385.820 metric tonnes of coarse rice against Sanna Rakam allotments. The bonus-related financial loss from these deliveries is estimated at approximately Rs. 1.69 crore.

Another 45,414.833 metric tonnes of paddy had reportedly been allocated for conversion, involving a potential bonus-related financial implication of around Rs. 242 crore. The CID said timely intervention by Civil Supplies authorities and the issuance of stoppage orders prevented further potential loss to the government exchequer.

The alleged substitution prima facie indicates violations of the Custom Milled Rice (CMR) agreement for the Kharif Marketing Season 2025–26, besides possible offences involving criminal breach of trust, wrongful gain and conspiracy to cause loss to the government.

The CID is investigating the alleged diversion and substitution of rice varieties, the processing of allotments and conversion requests, and the possible involvement of officials and other persons. It is also examining documentary and technical evidence to quantify the actual financial loss and establish whether a criminal conspiracy was involved.