Authorities in Gwalior district have uncovered a large-scale public distribution system (PDS) fraud in which wheat and rice worth over ₹7 crore were siphoned off, despite an online monitoring system being in place. Investigations have revealed that the ration meant for beneficiaries never reached them and was instead diverted and sold in the open market.
Officials said the scam, ongoing since at least 2019, involved distributors falsely recording full deliveries on point-of-sale (POS) machines, while stock was missing from shops during inspections. Gwalior’s 540 fair-price shops distribute 60,000 quintals of ration monthly, but a significant portion has been routinely disappearing.
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POS Data Mismatch, Beneficiary Fraud
The Food and Civil Supplies Department, after verifying both shops and beneficiaries, found that ration allocations were inflated compared to the number of eligible recipients. Dead individuals, women who had moved after marriage, and unverified minors or elderly citizens were still listed as active beneficiaries. In some cases, ration was withdrawn under these names for years.
Dubra subdivision recorded the largest theft, with 65 shops implicated in the misappropriation of around ₹6 crore worth of supplies. Officials believe the total fraud across the district could reach ₹20 crore once all stock checks are completed.
Multiple FIRs and Ongoing Recovery
Between 2021 and early 2024, dozens of fair-price shop operators have been booked under charges of misappropriation. FIRs detail individual fraud amounts ranging from ₹65,000 to over ₹22 lakh. High-profile cases include a 2021 charge against a vendor in Sirsa for ₹12.9 lakh, and a 2023 case in Logamandi where ₹3.11 lakh worth of wheat, rice, salt, and sugar were missing.
The government has introduced procedural changes to curb such fraud, including stricter beneficiary verification. So far, 92% of recipients have been Aadhaar-verified, with only young children and elderly individuals pending due to biometric limitations. Recovery efforts are underway, with pending amounts to be deducted from distributors’ commissions.
Officials have warned that until systemic loopholes are closed, both digital and manual ration theft will remain a serious challenge for the state’s welfare delivery network.