CAG 2According to an audit report by the Comptroller and Auditor General (CAG) it has been found that India does not have proper pricing policy for by-products of rice such as bran, husk, broken rice and nooks. The report has unearthed the great rice milling scam, which has been going on uninterruptedly for more than a decade, when the existing milling rules were formulated. Further, the report revealed that the sale of by-products of rice has huge demand in the local as well as in the global market. The report indicates that when the government hands over the paddy procured from farmers to millers for public distribution system (PDS) purposes, the  millers are left with nearly 32-33 kilograms of by-products per quintal (around 320 – 330 kilograms per ton) of paddy after milling the rice. All it includes 22 kilograms of rice husk, 8 kilograms of rice bran and 2 kilograms of broken rice, as reported by the Central Rice Research Institute.

Furthermore, there are indications in the CAG report that while the government pays about Rs.87 per quintal (around $13 per ton) for millers, however, the millers  earn an extra amount of Rs.169 per quintal (around $26 per ton) of paddy by selling the by-products. But, the government has not so far considered the by-products while pricing for milling paddy. It clearly indicates that that the government has been losing nearly Rs.10, 000 crore (around $1.5 billion) per year due to its faulty policy of giving the millers sole rights over the by-products of paddy. The accumulated losses over the years would have crossed over Rs.100, 000 crore (around $15 billion), as per the report.

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In view of this free and extra amount collected through the sale of the by-products of rice by the rice millers, the report will advise the government that the paddy by-products are the property of the state and the revenue earned belongs to the exchequer. Secondly, it will also advise the government to address these loopholes in the guidelines which are adopted by the millers, politicians and other high profile people. The report will be tabled in the winter session of the Parliament, which will begin shortly.

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