VACB’s sting operation uncovers widespread illegal diversion of food grains from NFSA godowns, ration shops in Kerala

In a state-wide operation, the Vigilance and Anti-Corruption Bureau (VACB) in Kerala detected large-scale illegal diversion of subsidized foodgrains allocated to an estimated 95.7 lakh ration card holders from various economic and social backgrounds.

As part of the undercover operation titled Operation Food Security, anti-corruption sleuths prepared staged scenarios by posing as black marketeers seeking to buy subsidized foodgrains from randomly selected National Food Security Act (NFSA) warehouses and ration shops at prices well below market rates, with the aim of creating a trap case to expose the deep-seated corruption that has massively disrupted public finances.

(The state government spends around ₹2,400 crore annually on food safety and price control of essential commodities, including ₹100 crore for ration distribution, dealer commissions and doorstep delivery charges for elderly and differently-abled citizens.)

A senior researcher told Hindu Field intelligence and preliminary investigations by various government agencies showed that an estimated 30% of the government’s subsidized grains and staples failed to reach the intended beneficiaries and were seized for black market transactions by a mafia that included ration shop licences, warehouse managers, transport contractors and roving Civil Supplies Department officials, resulting in staggering losses running into hundreds of billions of rupees to the public exchequer.

Investigators said they found that officials diverted significant amounts of subsidized food grain to poultry farmers and the hotel industry after accepting large amounts of backhauls. In Thiruvananthapuram, VACB found digital evidence of a ration card vendor receiving regular payments of lakhs of rupees annually from a poultry farm owner.

They contacted several cardholders associated with the ration shop and found that the licensee had tampered with the biometric authentication system built into the electronic point of sale (E-POS) machine and misused the one-time passwords (OTPs) received from the beneficiaries’ Aadhaar-linked mobile numbers to crash the system and legitimize black market activities. This situation is common in ration shops in the state, officials said.

VACB also found transporters using trucks without mandatory tracking devices to transport subsidized foodgrains from Government-owned warehouses to ration shops and Supplyco warehouses, thus cracking down on the Civil Supplies Department’s Vehicle Tracking and Fleet Management System, opening the door to mass illegal diversion of essential food items.

VACB said government officials aided the noise by ignoring fraudulent billing and glaring inconsistencies in exchange records. Inspectors said ration shop transactions were mostly done on paper and preliminary verification of physical inventories revealed an excess of essential food items, including foodgrains and sugar, in excess of the quantity entered in stock records.

VACB Managing Director Manoj Abraham supervised the operation.