An Right to Information (RTI) activist in Orissa's Nuapada district has unearthed a scam in which rice millers in collusion with government officials are minting money by carrying out fake transactions and in the process selling the highly subsidised Rs 2 per kg PDS rice back to the government at Rs 17 per kg.

Nearly 50 per cent of entries in the list of farmers who sold Rabi season paddy in 2008 to the government were found to be fake.

A farmer from the district said the people mentioned in the records neither belong to his village nor own any land there. "My name is there but I am landless. How can I ever sell paddy?" another farmer said.

Records say the government bought 77,000 quintals of paddy from Nuapada in May 2008 something that got RTI activist Ajit Panda suspicious because a harsh drought had killed most of the crop that season.

As he dug into the files he discovered it was a fraudulent transaction. ''Farmers identity cards are being printed by millers and used for the fake paddy transactions,'' Panda said.
 
There is another much bigger side to the scam: If the paddy transactions were fake, how did the millers supply over 46,000 quintals of processed rice to the government? Also where did the rice come from?
 
"The subsidised rice for BPL and APL people don't reach many panchayats and instead land up in the rice mills for recycling. The millers have sold that rice for Rs 1700 a quintal to the government,'' Panda pointed out.

When contacted, Bishnu Prasad Panda, collector of Nuapada district, said "An inquiry will be conducted by the sub-collector and the civil supply officer and after the submission of the report action will be taken against the culprits.''

The Nuapada paddy scam may appear small but it's only the tip of the massive grain robbery that's draining the public distribution system dry.