A major Income Tax operation has unearthed an alleged ₹500 crore scam in dal (pulses) trading across Telangana and Andhra Pradesh, exposing a nexus of traders, middlemen, and officials suspected of manipulating government procurement and market supply.
Raids Across Two States
- Over the past three days, the Income Tax Department carried out simultaneous raids at more than 25 locations linked to four major pulses trading companies in Hyderabad, Vijayawada, Guntur, Kurnool, and Visakhapatnam.
- Officials reportedly seized ₹4 crore in unaccounted cash and a large cache of digital and financial records. The raids were triggered by discrepancies between declared dal purchases and actual trading volumes, along with evidence of fake billing and cash laundering.
Modus Operandi: How the Scam Worked
- Preliminary findings suggest the traders diverted government-subsidized dal stocks meant for public distribution through cooperative bodies into the open market to profit from price fluctuations.
- To disguise the diversions, firms allegedly created bogus invoices, fake GST entries, and inflated procurement records.
Large cash withdrawals were made immediately after electronic transfers, a pattern investigators believe was part of a wider money-laundering chain involving fake suppliers and shell companies.
Possible Official Collusion
- Authorities suspect that the scam may have been facilitated by collusion among dal traders, civil supplies officials, and cooperative procurement agencies such as NCCF and Kendriya Bhandar.
Documents under examination include tender agreements, delivery schedules, and warehouse movement records. - Sources indicate that permissions were issued for large quantities of dal that were never fully delivered, even as payment records showed full completion of contracts.
Investigation Expands
- Income Tax sleuths are now auditing three years of financial data from the firms involved. The analysis focuses on mismatched figures between GST filings, stock movement logs, and income declarations.
Officials said the scale of the scam could grow as new leads emerge from seized digital evidence. - Both the Telangana and Andhra Pradesh governments have requested preliminary reports, and further action is expected under the Prevention of Money Laundering Act (PMLA) if evidence of deliberate fraud is confirmed.
Reactions & Impact
- Economic analysts say the raids highlight systemic weaknesses in India’s food procurement and subsidy monitoring systems.
Consumer rights groups have demanded transparency and stricter checks to prevent essential commodities like dal, a key protein source in Indian households from being siphoned off for profit. - Meanwhile, the IT Department has stated that “investigations are ongoing” and that more names could surface as digital forensics continue.
