Food Corp of India Refutes ₹1,160 crore Rice‑Ethanol Scam

The Food Corporation of India (FCI) has rejected media reports that a massive ₹1,160 crore diversion of subsidised rice for ethanol production occurred in Madhya Pradesh. FCI clarified that the investigation concerns only 242.5 quintals of rice – about 490 bags – with an estimated value of roughly ₹5.63 lakh, not the five‑lakh‑ton figure cited in the press.

FCI explained that the ₹1,160 crore number represents the total value of rice legitimately issued to distilleries under the ethanol blending programme, not a loss. Over the 2024‑25 and 2025‑26 supply years the corporation supplied about 5.39 lakh tonnes of rice to Madhya Pradesh distilleries.

Irregularities in rice movement were detected in early June 2026, prompting a FIR on June 5 and a joint inspection by FCI and the state Food Department on June 11. The Madhya Pradesh government has formed a Special Investigation Team, black‑listed a rice mill and imposed a ₹44.12 lakh penalty. Four individuals have been arrested as the probe expands to multiple trucks, rice mills and ethanol plants.