Hyderabad, Aug. 1 -- A statewide operation by the Vigilance and Enforcement (V&E) Department has unearthed an alleged scam involving the diversion of government-procured paddy worth nearly Rs 500 crore by rice millers.

The findings have prompted criminal cases against those involved and initiated a major recovery drive by the authorities, as reported by the Times of India.

Investigators said large quantities of paddy supplied to rice mills under the custom milling scheme were neither found in stock nor returned to the government as rice, resulting in significant losses to the state exchequer.

Under the scheme, the government procures paddy from farmers and allocates it to rice mills for processing. The mills are required to return a st...