Great Indian Rice Milling SCAM: CAG Blows The Lid Off Scam Worth 1 Lakh Crores!

The Logical Indian

November 26th, 2015 / 1:19 PM

News Source: thewire Image Source:  Land Rover Our Planet/Flickr

Rice mill owners are minting millions taking advantage of skewed pricing policy by the Governments both at the centre and the state. They make thousands of crores rupees by the sale of paddy by-products left over from the rice they process for the public distribution system (PDS).

The mill owners get these by-products free of cost, these include bran, husk, broken rice and nooks which enjoy a lucrative market – giving millers high returns on something which they do not have to spend a single rupee to buy.

The Wire reported that the CAG audits show that ‘The Rice Scam’ costs Rs 10,000 crore loss a year to the tax-payers.
Most of the mill owners are politicians or have political connections and in ten years span the cumulative losses could be more than Rs. 1 lakh crores.

Both Central and state procurement agencies buy the paddy from farmers at fix prices and supply it to mills for processing. When a mill is given 100Kg of rice it returns 67 Kg of processed rice back. So they get to keep around 32-33 kg of by-products like husk, rice bran and broken rice.

With the time market for by-products has been flourished and become very lucrative. Paddy by-products are used in a wide range of industries: power generation, solvent plants, pharmaceuticals, brick kilns and breweries.

Judging by the numbers we can put ‘Great Indian Rice Milling Scam’ alongside high-profile and visible 2G and coal scams, but this misses the media glares and prime-time debates.

We hope soon both center and state governments wake up to this and see the exchequers’ hard earned thousands of crores of rupees are drained by mill-owners. And make a fool-proof system and implement right pricing policies, which can benefit the farmers and common mass not just a few mill owners.


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