PDS fine rice diversion under scanner as prices soar in Telangana

Hyderabad: With fine rice prices soaring in retail markets, millers and traders are resorting to various irregularities, including the diversion of fine rice supplied through the Public Distribution System (PDS) and overpricing.

The State government launched the distribution of fine rice through the PDS in March 2025. At the time, experts and opposition parties had expressed concerns that the rice supplied through the scheme could be diverted for black marketing. Those concerns appear to be materialising, with 12 cases registered against rice traders for irregularities, including illegal stockpiling and overpricing. The violations came to light during joint enforcement operations by officials from the Civil Supplies, Police, GST and Legal Metrology departments.

Extensive inspections have been carried out in Hyderabad, Rangareddy and Medchal-Malkajgiri districts. The operations covered major wholesale trading centres, including Begum Bazaar, Nampally and Maharajgunj. Raids are likely to continue across the State to identify violations, curb excessive pricing and provide relief to consumers.

In a few cases, fortified rice supplied through the PDS was being polished and purchased from beneficiaries at Rs.20 a kg. Some traders were mixing it with other varieties and selling it in branded bags at much higher prices in retail markets. Investigations also revealed that such bags were being transported to Maharashtra, Karnataka, Chhattisgarh and other States.

The State currently has 1.06 lakh ration holders and about 3.42 beneficiaries. Each beneficiary receives six kg of rice every month. More than 2.05 lakh metric tonnes of rice is supplied across the State every month. The government spends Rs.14,000 crore annually on implementing the scheme.

However, the practice of purchasing rice from beneficiaries and selling it at higher prices is defeating the purpose of the scheme. Adding to the concerns, fine rice varieties are becoming increasingly expensive. Depending on the variety, fine rice is being sold at Rs.80 to Rs.95 a kg in retail markets.

Traders are anticipating lower fine rice production this season due to the impact of El Nino. This could push prices up further. Taking advantage of the demand, millers and traders are resorting to various irregularities. Over the past few days, raids in different parts of Rangareddy district have led to the seizure of huge quantities of ration fine rice from mills. Substantial quantities have also been seized in Karimnagar, Nalgonda, Miryalguda, Devarakonda and other areas.

The Civil Supplies Department said inspections were being conducted at wholesale shops, retail outlets and rice mills to check hoarding and black marketing. Officials also said meetings were being held with traders to address the sharp rise in retail prices. Civil Supplies Minister N. Uttam Kumar Reddy issued a stern warning to rice traders against illegal hoarding, black marketing and selling rice at exorbitant prices. He warned that the government would take stringent action against those found violating the rules.