India | Updated Jul 24, 2009 at 04:03pm IST

UPA caught in alleged Rs 2500-crore rice scam

Veeraraghav T MVeeraraghav T M, CNN-IBN

New Delhi: Rice is sold at Rs 2 a kg in many Indian states but it could also fetch a fortune in the international market and so it became the ingredient for an alleged Rs 2,500-crore scam.

Twenty-one African countries were reportedly supplied with Indian non-basmati rice since 2008 despite an export ban. The Government used humanitarian grounds to let private exporters send rice worth millions with alleged clearances from both the Commerce Ministry and the Food Ministry.

Rice was even exported to countries like South Africa which have a higher per capita income than India and to Nigeria which even refused to take the rice.

According to a report in Outlook magazine:

  • Instead of using the Food Corporation of India and the Shipping Corporation the Government cleared a private company to send the rice and earn the profits.
  • Rice sent to Sierra Leone had a Swiss company named Novell as the buyer.
  • 1,17, 000 tonnes of rice was sent to Nigeria which had a bumper crop and refused to accept the rice.
  • Then the rice was diverted to South Africa which has higher per capita income than India.
  • The African countries could have been just a front to sell the rice in international markets.
  • "But the rice did not even reach the desired African countries. It went somewhere else and resulted in an escalation of the international prices,” Rajya Sabha MP D Raja said.

    Meanwhile, Agriculture Minister Sharad Pawar refused to comment of the issue.

    The then Commerce minister Kamal Nath who now heads the Surface Transport Ministry is also yet to comment on the matter but the issue could be potentially embarrassing for the re-elected UPA Government.

    (With bureau inputs)

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