Large-scale irregularities and corruption seem to have taken place in the custom milled rice (CMR) system during the previous Bharat Rashtra Samithi regime in Telangana, exposing what is considered to be a multi-thousand crore scam involving rice millers, political patronage and systematic diversion of public resources.
According to sources, the alleged irregularities between 2019 and 2023 point to the diversion of over 22 lakh tonnes of rice (nearly 2 crore quintals), amounting to a financial loss estimated at around Rs 10,000 crore to the state exchequer.
One example is that of Imandi Narsaiah, owner of multiple rice mills in Suryapet district, who is alleged to be a benami of former minister G. Jagadish Reddy.
Narsaiah reportedly lifted paddy far in excess of his milling capacity, processed it and sold the rice in the open market, instead of returning it to the government as CMR.
Officials estimate that the loss in this single case, including interest, stands at Rs 240 crore. Although cases were registered and he was arrested and jailed, Narsaiah has reportedly not repaid a single rupee to the government so far.
When the Revanth Reddy government attempted to invoke the RR Act and seize his mills, he secured a stay from the court.
Such was the massive corruption in the case is that Narasaiah is said to have recently produced a film and hosted celebratory shows, triggering public outrage over the perceived impunity.
Another prominent case is linked to former Bodhan MLA Shakil, with officials estimating CMR diversion worth Rs 70 crore.
Overall, the scale of diversion — 22 lakh tonnes of rice — is staggering. In retail terms, this translates to around eight crore rice bags each of 25 kg capacity, enough to feed lakhs of poor families for years under public distribution schemes.
The issue resurfaced strongly after Civil Supplies officials conducted raids on 19 rice mills, finding that in 14 mills, paddy worth nearly Rs 60 crore was missing. This indicates that illegal diversion of government paddy continues even now, despite the change in regime.
However, critics also point out that despite the scale of the alleged scam, the government is yet to bring a comprehensive law in the assembly to deal with CMR frauds stringently, raising questions about political will.
