A probe by Dainik Bhaskar alleged that officials diverted newly purchased fortified rice, valued at ₹3,900 to ₹4,000 per quintal, to ethanol plants by misusing a Central Government policy meant for surplus food grain stocks. The diverted rice was reportedly supplied to ethanol operators, who then resold it at low prices to rice mills.
According to the investigation, the rice mills repackaged the same stock as custom-milled rice and returned it to state warehouses, allowing those involved to collect milling charges and government subsidies while repeatedly circulating the same rice through the system. The alleged operation was reportedly centered around facilities including the AVJ Ethanol Plant in Chhindwara and the Nawegaon warehouse in Balaghat.
A Special Investigation Team has questioned more than 40 people as part of the ongoing investigation. Since early June, authorities have arrested four individuals and seized 12 trucks linked to the alleged operation. Investigators are examining the suspected diversion of up to 50 lakh quintals of fortified rice over the past year while probing concerns that the scam may involve a wider network of officials and other participants.
The alleged diversion of fortified rice intended for welfare programmes for malnourished children has raised serious concerns over the misuse of public resources and the integrity of government distribution systems. The ongoing investigation is expected to determine the full scale of the alleged fraud and identify all those involved in the suspected network.
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