The government entrusted rice millers with paddy to mill and return within 15 days. Three years and Rs 3,960 crore later, the millers had produced everything except rice — films, properties, and new mills under family names. The custom milling policy became a custom funding policy.
When 360+ rice millers in Telangana were handed government paddy under the custom milling rice policy, they were supposed to return milled rice within 15 days. Instead, they've been sitting on the stock since the 2022-23 financial year, redirecting the proceeds into an impressively diversified portfolio: Tollywood film production, real estate ventures, asset acquisitions, and — in a move that would impress any venture capitalist — establishing entirely new rice mills under family members' names using the original mill's stolen rice money. Individual defaults range from Rs 1 crore to Rs 100 crore. Public Prosecutor Palle Nageswar Rao told the Telangana High Court that the Rs 3,960 crore hole has "severely strained state finances" and crippled welfare schemes. The millers, for their part, filed 360 petitions asking the court to quash their criminal cases. The government opposed all of them.