Ethanol Scam Hits MP, SIT Probe Ordered, AICC President Kharge Alleges Scandal May Be Of Scale of Rs 1,200 Crore

Even as the SIT began investigating the seizure of a truck containing 242 quintals of subsidized rice destined for an ethanol plant unit in Madhya Pradesh’s Chhindwara district from a rice mill facility in the state’s Balaghat district, the police suspected that the seizure of the consignment might have been the ‘tip of the iceberg’ and the scam might have spread across Madhya Pradesh.

“We will investigate this matter thoroughly,” Balaghat district inspector general of police (IGP) Lalit Sakyawar said.

At a time when the SIT is expanding its investigation to larger parts of the state, AICC chief Mallikarjun Kharge on Saturday claimed that the scandal could be on the scale of Rs 1,200 billion.

Mr. Kharge claimed in his X post that “Madhya Pradesh has become a hub of plunder by the BJP.”

According to the police, the subsidized rice from the Food Corporation of India (FCI) warehouse in Balaghat was supposed to reach an ethanol production facility in Chhindwara district.

The truck carrying the rice consignment was seized from a rice milling unit in Balaghat district, prompting the police to lodge an FIR in this regard.

Police investigation suggested that the subsidized rice procured from FCI for the ethanol unit was recycled to the rice mill where the accused ‘planned to recycle the rice under the Special Milling Program 2025-26 and reinvest it under the same programme’.

The ethanol producer involved in the scandal instead bought cheap rice for his unit, police said.

Subsidized rice is being sanctioned on ethanol units under the Centre’s policy to increase ethanol production for blending with oil to alleviate the fossil fuel crisis caused by the ongoing Gulf conflict.

Police said the seizure of the rice truck followed complaints received alleging ethanol fraud in the state.

Police said four people have been arrested so far in connection with the alleged fraud.