Hyderabad: The Telangana Crime Investigation Department (CID) has registered three criminal cases and arrested 14 rice millers over the alleged diversion of government-allotted paddy and the supply of cheaper coarse rice in substitution of the Sanna Rakam variety to the Food Corporation of India (FCI) during Kharif 2025-26.
Officials searched 16 mills in Mulugu, Karimnagar and Nizamabad districts in the early hours of Sunday and confirmed irregularities at 14 of them. Of those arrested, seven are from Mulugu district, four from Nizamabad and three from Karimnagar.
The 16 mills reportedly delivered 3,385.820 metric tonnes of Doddu Rakam rice against Sanna Rakam allotments, causing the government a bonus-related loss estimated at Rs 1.69 crore. After detecting the irregularities, officials stopped 45,414.833 metric tonnes of paddy allotted for custom milling, preventing a loss of Rs 242 crore to the government.
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.
A General Manager of the Civil Supplies Department's procurement wing lodged a complaint with the CID on Saturday, alleging irregularities in rice supply, and the officials began an investigation immediately. Vigilance Enforcement and Task Force (ETF) teams then carried out large-scale inspections. The rice supplied by the millers was tested in laboratories and found not to meet the required standards.
In 2025-26, the state government procured 71.86 lakh metric tonnes of paddy for custom milling. Millers were required to mill this paddy and supply 59.60 lakh metric tonnes of rice to the FCI.
The CID is examining the role of the millers and the manner in which allotments and conversion requests were processed. It is collecting documentary, technical and other corroborative evidence and will quantify the actual loss. Investigators are also looking into the involvement of officials and other persons, and whether a wider network was behind the diversion of paddy, the substitution of rice varieties and the accumulation of stocks.
The arrested millers include Badam Praveen, president of the Rice Millers Association, Mulugu, Lalshetty Gangaprasad of Padmavathi Agro Industries, Nizamabad, Potla Anjaiah, owner of Venkateswara Agro Industries, Bondugula Devender, owner of Srinivas Trading Agro Industries, Lalshetty Srikanth of Master BHUDI Agro Food Industries, Kalluru Krishnamurthy, owner of Varalakshmi Industries in Dammakkapet, Huzurabad, Balla Mallikarjun, owner of Annapurna Traders in Jammikunta, Yamsani Sampath Kumar, owner of Lakshmi Sai Industries and Lenkalapalli Madhusudhan, owner of Karunya Enterprises. The others arrested are Akkula Raghottam, Enagandula Mohan, Lanke Potharaju, Badam Anil and Malyala Praveen.