Investigate Rs 10,000-cr paddy purchase ‘scam’: Centre to Punjab

By Ruchika Khanna

The Centre has asked the Punjab Government to probe the alleged paddy purchase scam during the 2025-26 season.

It is alleged that bogus purchase of paddy worth Rs 6,000 crore to Rs 10,000 crore has taken place in Punjab mandis this year. The allegations have been levelled by a Sangrur-based commission agent-cum-rice mill owner. It is alleged that the commission agents in mandis issued fake J Forms in the name of farmers, who received payments in their accounts. The money was then shared between farmers, commission agents, rice millers and officials of procurement agencies.

Later, cheaper paddy is alleged to have been purchased from outside the state at Rs 600 per quintal below the MSP and passed on as paddy purchased in the state at higher MSP.

Following the directions issued to the Punjab Chief Secretary by the Department of Revenue, Union Ministry of Finance, the state government’s Department of Food, Civil Supplies and Consumer Affairs has asked all district food and supply controllers (DFSCs) to convene a meeting of their respective allotment committees, probe the matter and submit their reports by February 13. A copy of these directions, issued by the department on January 29, is in the possession of The Tribune.

The DFSCs of all districts, in turn, have convened meetings of the allotment committees, beginning Monday. Punjab Food and Supply Minister Lal Chand Kataruchak told The Tribune that he was not aware of the case.

A senior official in his department, requesting anonymity, said they had received a complaint filed by a rice miller to the Prime Minister and (seven) other top functionaries in different central ministries and investigating agencies. “I can only say that the complaint is so far unsubstantiated and there is unlikelihood of any bogus paddy purchase because of the strictness adopted by the department. Nevertheless, we are verifying all purchases and a comprehensive report will be sent to the Centre,” he said.

The complaint, submitted to functionaries of the Central Government, is also in the possession of The Tribune. It has elaborated on how the scam unfolded in the state. It says after the money was transferred to the account of farmers via fake J forms, the agent issued a gate pass showing the transfer of paddy to a rice miller, who, in turn, acknowledged the receipt of paddy without actually receiving it and received the payment in cash in lieu of the paddy

“The commission agent got a commission of Rs 45 per quintal along with mandi expenses of Rs 55 per quintal. The staff of the procurement agency and the mandi board got Rs 50 per quintal and Rs 10 per quintal, respectively. Some millers/commission agents brought paddy from UP and Bihar to complete the shortfall in the actual stocks of paddy by evading all taxes and levies.

After the procurement in the mandis was over, the staff of the procurement agency and the field staff of the FCI showed the actual storage of paddy by doing a physical verification of the stock though no stock was available physically. The staff charged Rs 10,000 to Rs 30,000 per rice mill for the same. One single consignment of 290 quintals delivered this way makes the rice miller richer by Rs 4 lakh and the total amount involved can be gauged from this as lakhs of tonnes of rice are procured every crop season every year,” it says.

The complaint also states that Punjab was ravaged by floods last year and yield loss was reported because of high moisture as well as use of hybrid seeds.However, the paddy purchase in many flood-affected districts was the same as in 2024-25. The state government had also ordered a probe into this as well as paddy purchase in some districts such as Amritsar, Tarn Taran and Fazilka.

This article has been republished from The Tribune