A major scam involving government rice meant for ethanol production has surfaced in Madhya Pradesh, even as ethanol-blended petrol is being promoted nationwide as an eco-friendly fuel. An investigation by Dainik Bhaskar has found that a large portion of the rice allocated for ethanol manufacturing never reached the production process. The investigation revealed that most of the 5 lakh metric tonnes (50 lakh quintals) of government rice was diverted back into government warehouses instead of being converted into ethanol. The rice involved is estimated to be worth around ₹1,160 crore. The probe further found that the stock was not ordinary rice but fortified rice, enriched with essential vitamins and minerals and meant for children, pregnant women and adolescent girls to combat anaemia and malnutrition. The findings have raised suspicion of a nexus involving ethanol plant operators, rice millers and government officials in the alleged scam. Know how this scam is happening in the name of green energy.. 3780 crore ethanol Subsidised rice allocation meant for ethanol raises questions over pricing To understand the alleged scam, it is important to examine how the government procures and prices rice supplied for ethanol production. The Centre argues that excess grain cannot be stored indefinitely as it risks deterioration, while warehouses must also be cleared to accommodate fresh crop arrivals. The government also maintains that diverting surplus rice for ethanol production helps meet the country’s energy needs and reduces dependence on fuel imports, saving valuable foreign exchange. Under this policy, rice that costs the government around ₹3,900-4,000 per quintal to procure, store and process is supplied to ethanol plants at a subsidised rate of ₹2,320 per quintal. Govt rice price table How was the scam detected? Investigation begins after rice consignment meant for ethanol goes missing The alleged diversion came to light after three truckloads of government rice dispatched from the Nawegaon warehouse in Balaghat to the AVJ Ethanol Plant in Borgaon, Chhindwara, on June 2 failed to reach their intended destination. Official records showed the consignment was meant to be used for ethanol production. However, on June 3, one of the trucks was traced to Sancheti Rice Mill in Balaghat instead of the ethanol plant, while the remaining two trucks also never reached the facility in Chhindwara. Following the discovery, the police constituted a Special Investigation Team (SIT) to probe the suspected diversion. These facts have emerged in the investigation so far Chart Know sequentially who played what role 21 ethanol plants FCI says accountability ends once rice is dispatched Food Corporation of India (FCI) officials said nearly 50 lakh quintals of rice were allocated to ethanol plants in Madhya Pradesh over the past year. If the entire quantity was diverted and sold in the open market instead of being used for ethanol production, the estimated fraud could be around ₹250 crore. An FCI official, speaking on the condition of anonymity said, “The corporation’s responsibility ends once the rice is released from its warehouses. It is not accountable for the grain after dispatch”. Timeline Ethanol industry body urges action only against guilty operators An office-bearer of the Ethanol Plant Association, speaking on the condition of anonymity, acknowledged that in some cases government rice meant for ethanol production had been diverted to rice millers instead of reaching ethanol plants. However, the association maintained that any wrongdoing should be investigated on a case-by-case basis. It said, “Strict action should be taken against the operators found guilty.” It warned against holding the entire ethanol industry responsible for the alleged irregularities. Probe under scrutiny as police remain tight-lipped over alleged nexus Despite investigating the case for over a month, the police have yet to make any detailed public statement. Sources say the probe has uncovered the names of several influential individuals, prompting investigators to maintain silence on the matter. Experts allege that the investigation is being slowed by a wider nexus involving multiple stakeholders. They also claim leaders from both the BJP and Congress have links to the alleged network, which they say explains the lack of strong political response to the issue so far. Post navigation Police arrest 2 with ₹10 crore MD drugs:3 kg narcotics recovered, investigation focuses on supply chain and illegal factory Five killed after car crashes into truck:3 women, child and man die on NH-43, one critical
