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Maoists extort up to Rs 2,000 crore across India

Last updated on: April 28, 2010 16:36 IST
A group of tribals, displaced by Maoist violence, at a camp in Dornapal in Chhattisgarh

To carry on their violent activities across 223 districts in India, Maoists need a massive annual budget of Rs 2,000 crore to procure latest arms, perpetuate jungle warfare, continue propaganda and recruit new cadres. In an article for the South Asia Intelligence Review, Ajit Kumar Singh and Sachin Bansidhar Diwan reveal how the Left-wing extremists gather their 'revenues' via a complicated network of extortion, threats and narcotic cultivation.

For all the talk of Maoists being 'criminals' and 'extortionists', Left-wing extremists perceive themselves as engaged in a coherent, strategically consistent, and enormously successful approach to the generation of necessary financial resources for their 'revolution'.

Article 60 of the 'constitution' of the Communist Party of India - Maoist lists 'membership fees, levies, donations, taxes, penalties and wealth confiscated from enemies' as principal sources of revenue. Of course, the overwhelming proportion of these various revenues are not ordinarily eagerly relinquished by those who 'contribute' to the Maoist treasure chest, and the rebels employ a range of the most unsavoury methods of extraction.

The CPI-Maoist networks of revenue generation are estimated to extend, at various degrees of efficacy, across 223 districts (in a total of 636 districts in the country). Significant disruptive dominance has been established by the Maoists in the jurisdiction of nearly 2,000 police stations (out of a total of over 14,000 police stations in the country), covering roughly 40,000 sq kms.

On November 29, 2009, Chhattisgarh Director General of Police Vishwa Ranjan claimed that the Maoists annually extort up to Rs 2000 crore across India. Earlier, documents and hard disks seized from Misir Mishra, a central committee member of the CPI-Maoist, who was arrested in Jharkhand in March 2008, had revealed that the CPI-Maoist collected over Rs 1000 crore in 2007 through their state committees and had set a target of Rs 1125 crore for 2008. Accordingly, increased levies were imposed on the state committees.

The seized documents showed that Andhra Pradesh had gone down in the fund raising ranking from second to third spot, after Bihar and Chhattisgarh. While Bihar raised Rs 200 crore in 2007, Andhra Pradesh collections came down from Rs 300 crore to Rs 100 crore. Jharkhand raised Rs 75 crore in 2007 and was expected to raise Rs 110 crore in 2008. Maharashtra raised Rs 100 crore while Karnataka contributed Rs 78 crore, and Tamil Nadu pitched in with Rs 35 crore in 2007. Mishra reportedly told the police that some prominent Maoist leaders, such as Andhra Pradesh state committee secretary Konapuri Ilaiah aka Sambashivudu (who eventually surrendered to the police on February 15, 2009) alone raised over Rs 80 crore and Muppala Lakshman Rao alias Ganapathi, the 'general secretary' of the party, raised Rs 285 crore in 2007.

Article courtesy: South Asia Intelligence Review

Maoists have made deals with poachers, smugglers

Last updated on: April 28, 2010 16:36 IST
CRPF personnel pay their last respects to the policemen killed in the Dantewada massacre

Mishra had revealed further, "All the leaders operated their own bank accounts, funded their units and operations but reported to the central committee. They also contributed to the corpus fund of the central military commission separately for the maintenance of the provincial guerrilla army."

The Maoists target road contractors, contractors for forest products like tendu patta (leaves of the Diospyros Melonoxylon plant used in making beedis), bamboo and wood. They have reportedly made deals with poachers, smugglers and liquor and timber runners in the forests. In the areas under their control, including district towns, Maoists levy a 'tax' on small enterprises, such as spinning mills, beedi units, rice and flour mills, grocery, medical, cigarette and liquor shops, and private doctors.

All 'illegal' operators, including private schools operating in villages and district towns, are also coerced to pay. The Maoists secure large revenues from iron and coal mining companies. Apart from abductions, extortion and looting, Maoists also set up unofficial administrations to collect 'taxes' in rural areas, where the official government apparatus appears largely to be absent.

Another major source of funding for the Maoists is poppy or opium cultivation. The Ghagra area of Gumla District in Jharkhand and parts of Gumla, Kishanganj and Purnia districts in Bihar are reported to be the principal pockets of poppy cultivation exploited by the Maoists. Security forces claim that opium fields are screened and hidden behind peripheral maize cultivation.

The finance ministry in its annual report for 2009-10, released in March 2010, said that the Central Bureau of Narcotics carried out destruction operations on at least 1,443 hectares in 2009 alone. In 2007, the same agency had carried out a similar action at a much larger scale in bordering areas of West Bengal, where it had destroyed illicit opium grown over 6,000 hectares. The illicit crops destroyed in Murshidabad and Nadia districts of West Bengal were then estimated at a value of over Rs 120 crore, if diverted to drug cartels for the manufacture of heroin.

In India, opium is cultivated under strict licensing procedures in select pockets spread across three states -- Rajasthan, Madhya Pradesh and Uttar Pradesh. The entire opium crop is purchased by the government and processed at government-run factories for their further use in pharmaceutical industries.

Ganja is being cultivated under Maoist supervision

Last updated on: April 28, 2010 16:36 IST
Policemen destroy cannabis plants during a drive against cannabis production

The cultivation of ganja (cannabis) is another source of Maoist revenue. The Justice P K Mohanty Commission of Inquiry, which submitted its report in December 2008 on the activities and operation of the drug mafia in Orissa, highlighted that Maoists in the state were supporting extensive cultivation of ganja in hilly and inaccessible areas. The report gave details of how the cultivation of ganja in Maoist-affected districts was being supported by Chasi Mulia Samiti, a front organisation of the CPI-Maoist.

The Samiti was banned by the state government on June 9, 2006. The report, based on an extensive investigation in 2003, said cannabis was being cultivated at the behest of Maoists in Ganjam, Gajapti and Malkangiri districts. The report estimated that about 3,000-4,000 hectares of encroached forest land, mostly dominated by the erstwhile People's War Group (which later merged with the Maoist Communist Centre to form the CPI-Maoist) were being utilised for the cultivation of cannabis. The report noted that Bargarh district had emerged as the epicentre of this trade.

The director general of the Central Economic Intelligence Bureau had written, in June 2009, to all chief secretaries and heads of anti-narcotics agencies, and other departments concerned, urging them to initiate steps to eradicate cultivation of illicit opium that had spread over 10 states. The Centre had provided satellite images and shared other inputs, pinpointing areas where the opium crop was grown on large tracts running into thousands of hectares. Security agencies don't rule out the fact that Maoists are not only benefiting from the illicit trade but, in many areas, the crop is being cultivated under their supervision. The government had asked the Narcotics Control Bureau, under the home ministry and the Central Bureau of Narcotics, under the department of revenue in the finance ministry, to take adequate action.

Finance has never been a constraint on Maoist activities in Jharkhand. The state's forest and mineral resources and related industries provide an almost limitless source of extorted revenues. Jharkhand police's documents suggest that a section of contractors, transporters and businessmen involved in illegal mining pay over Rs 40 crore annually as 'levy' to the CPI-Maoist in the state. Another lucrative source has been the Centre's ongoing Golden Quadrilateral highway project.

Extortion from the common man is pegged at Rs 10,000 per for a farmer per year, virtually across the state. The Maoists also have reportedly made deals with poachers, smugglers and liquor and timber runners in the forests. The Maoists have also approached schools for funding their activities. In July 2009, they demanded Rs 50,000 from a government school in Lathehar District's Sinjo region and threatened to blow up the school if their demand was not met.

'Maoists can bring many sectors to their knees'

Last updated on: April 28, 2010 16:36 IST
A train compartment which was derailed after Maoist rebels blew up a railway track in Jharkhand

The Maoists have also been known to receive funds from some of the top corporate houses. These companies are big players in the metals, mining, steel and manufacturing sectors. Senior Maoist leader in the Bihar-Jharkhand area, Narla Ravi Sharma, arrested in Bihar in October 2009, told the authorities that these companies regularly pay the Maoists.

On March 5 this year, Union Home Secretary Gopal K Pillai stated, "They (the Maoists) can now bring many sectors of the Indian economy to their knees. But they don't want to do it today. They know that if they do that now, the State will come down very hard on them. They are not fully prepared to face the onslaught of the State machinery. So, they would rather go very slowly."

Reports also indicate that a number of non-governmental organisations were funding the training of Maoists in Bodhyaga district of Bihar. As many as 22 NGOs in Gaya district were issued a show-cause notice for their Maoist links in July 2007. Block Social Welfare Officer Chandrika Prasad noted, "A lot of NGOs are involved with Naxal elements. We even know that many of the NGO workers are Maoists themselves."

Dwarko Sundrani, who runs Samanvaya Ashram, an NGO in Bodhgaya, admitted that such links existed, stating, "Naxals often approach us for money, but we provide them food, clothing and shelter as we believe in the concept of hriday parivartan (change of heart)."

A Bihar government document lists several NGOs suspected of diverting funds to the Maoists. Most of such NGOs are funded by visiting tourists or international donor agencies. The then Bihar home secretary, Afzal Amanullah, stated in July 2007, "Intelligence agencies did report such things being channelised. Now, we have got to warn foreigners and do a lot of planning to stop this worrisome syndrome from spreading."

Deputy Inspector General of Magadh Range Umesh Kumar Singh added, "If the money goes in bulk to them, it'll be quite threatening to the internal security of the nation."

Prime Minister Manmohan Singh had clarified in Mumbai on October 11, 2009, "There is no particular evidence or intelligence that Naxal groups received funding from abroad," though he added, "Rumours are always afloat."

Maoists spent over Rs 175 crore on weapons

Last updated on: April 28, 2010 16:36 IST
Security personnel train at a counter-terrorism and jungle warfare school in Kanker village in Chhattisgarh

Similarly, answering a question regarding foreign and other sources of Maoist funding, Union Minister of State for Home Ajay Maken told Parliament on November 24, 2009, "There is no input to indicate that CPI-Maoist are receiving funds from any foreign country. The Naxalites mainly raise funds from contractors and businessmen by imposing levy, by extortion and also by looting banks."

On the expenditure side, police sources reveal, the Maoists spent over Rs 175 crore in 2007 for the purchase of weapons, including AK-47s, landmines and rocket launchers. According to the police, an Australian arms dealer had struck a deal with the Maoists to supply a record 200 AK-47s by the end of 2008, via the Malaysia-West Bengal drug route.

Vehicles, uniforms and medicines are another major component of expenditure. The Maoists have acquired motor cycles with special tyres to make travel easier in dense forests and tough terrain. Publicity and propaganda is another major area in which the Maoists spend considerably. Besides maintaining websites, publishing party magazines Awam-e-jung (Hindi) and CPI-Maoist (English), they also operate a low frequency radio service in the jungles to campaign against the police and the administration.

The Maoists also spend huge sums on communication equipment, and mobile and satellite phones are common issue. The Raipur police raided an urban Maoist network centre and seized account books for the collection and disbursal of Rs 50 million. The raid yielded receipts for purchase of uniforms for nearly six battalions, supplied by a Mumbai-based textile unit.

Disclosing details, DGP Vishwa Ranjan adds, "Around 20 per cent of the amount extorted is siphoned off by grassroots Maoist cadres, who pass on the remaining 80 per cent to the top leadership of the banned CPI-Maoist. The CPI-Maoist uses the extortion amount for smuggling ammunition even from some foreign countries, for party meetings, boosting urban network and to care for a vast publication section, including a set of experts who manage the Maoist website, plus funding its legal cell that takes care of court cases against thousands of jailed Maoists across the country."

Buoyed by their inflated coffers, the Maoists are attempting to attract more unemployed youth into their 'armed struggle', paying out Rs 3,000 to each cadre as salary, and a cut in the monies extorted. Such monetary incentives have led to many unemployed youngsters hailing from backward areas in the Naxal-hit states joining the movement, officials say.

One home ministry official stated, "It is a matter of concern. Acute poverty, coupled with lack of job opportunities, is turning many youths to Naxalism. They get Rs 3,000 as monthly remuneration and a cut of the extortion money they collect."

Centre fights against Naxal funding

Last updated on: April 28, 2010 16:36 IST
The bodies of CRPF personnel killed in the Dantewada massacre

In an effort to design a comprehensive response to Maoist finance networks, a source in the MHA revealed, on the condition of anonymity, "The government is developing innovative measures to control Naxal funding based on the specific situation in the states and on the local level. Naxals extort money from contractors. Therefore, instead of giving large amounts to big contractors, it is being distributed and directly given to self help groups for development work. Abolishing the contract system in minor forest produce collection and marketing is another such measure implemented to check extortion of tendu leaf contractors. In some locations, police and security force engineers are constructing roads, instead of contractors."

However, he added, it was difficult to deal with the situation because people generally do not come forward to register first information reports against Maoist extortion due to fear.

The government has also decided to set up a 'centralised database' to check terror funding by integrating intelligence from different central security agencies. Sources in the home ministry disclosed that the proposed database would act as a 'ready reckoner' for different security and law and order enforcement agencies to check illegal routing of money through various financial channels meant to further organised crime and support anti-national activities.

They said the databank would be created to detect illegal money movement within and outside the country and among particular groups or institutions by means of banks or other intermediaries. There is presently no such consolidated data bank for collecting and disseminating intelligence which, at times, creates problem for the government in tracing and interdicting terror funding. The data bank would be created by the Financial Intelligence Unit-India -- a national agency responsible for receiving, processing, analysing and disseminating information related to suspect financial transactions.

The government, meanwhile, has frozen 18 bank accounts found involved in terror financing under the Unlawful Activities (Prevention) Act. Also, the Enforcement Directorate has registered nearly 30 cases across India over the last three months against terrorists on charges of money laundering and waging war against the country, according to a February 3, 2010 report. Though these actions have targeted other terrorist groups, and not the Maoists, a similar drive against Maoist finance networks is an evident imperative.

Home Minister P Chidambaram has declared, "We must meet the challenge to fight against Maoists and terrorism in the next two to three years."

Success in this enterprise will depend enormously on dismantling the resource generation networks of the Maoists, which have allowed the movement to persist and thrive.