FCI tightens rules for subsidised rice to distilleries, warns of criminal action for misuse
The Food Corporation of India (FCI) has introduced stricter oversight for the allocation and use of subsidised rice supplied to distilleries under the government's ethanol blending programme. The move aims to prevent diversion of foodgrain intended for ethanol production and strengthen accountability across the supply chain.
In revised operational guidelines circulated to all field officers, FCI stated that before releasing rice, depot managers must obtain a written undertaking from the authorised representative of the distillery. This undertaking will hold the distillery solely responsible for the proper utilisation of the subsidised rice once it leaves FCI depots.
The guidelines warn that if any misuse or diversion of the rice is detected—whether during or after the transaction—FCI reserves the right to take appropriate action, including filing criminal cases against the offending party. This marks a significant escalation in enforcement measures compared to previous protocols.
Under the new rules, distilleries must provide detailed information about vehicles used for transport, including registration numbers, and specify the destination godowns where the rice will be stored. Depot managers and quality control officials are directed to issue stocks strictly on a first-in, first-out (FIFO) basis and only to authorised representatives.
The ethanol blending programme, which aims to blend petrol with ethanol derived from agricultural products, has been a key policy initiative to reduce oil imports and support farmers. Subsidised rice is provided to distilleries to keep production costs low. However, concerns over diversion of subsidised grain for other purposes prompted the tighter safeguards.
FCI officials have been instructed to maintain strict vigilance and ensure compliance with the new guidelines. The corporation said it will monitor the entire process from allocation to final use, and any irregularities will be dealt with firmly.
Industry experts say the move could improve transparency but may also increase compliance burdens for distilleries. The new guidelines are effective immediately across all FCI depots.
