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HindustanTimes Fri,29 Aug 2014

Maoists raise Rs. 140-250 crore a year through extortion, protection rackets

Aloke Tikku, Hindustan Times  New Delhi, July 20, 2013
First Published: 00:45 IST(20/7/2013) | Last Updated: 02:09 IST(20/7/2013)

They wield influence in nearly 203 of India’s 708 police districts, routinely kill people and policemen in 90 districts, often have the last word in 27 of them, hope to lead a revolution and — by 2050, according to one account — overthrow the Indian State.

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So how does the Communist Party of India (Maoist) find the money to keep the fire burning for the revolution?

A government-commissioned study concluded this month has told the home ministry that Maoists generate at least Rs. 140 crore annually from extortion rackets that target businesses — big and small — industry, contractors executing public works, corrupt government officials and political leaders.

“The largest and principal sources of income for the Maoists are the mining industry, public works and collection of tendu leaves,” the study says.

Police officer ML Meena has seen some of it first-hand.

In January this year, Meena, inspector general of police, Bokaro Range in Jharkhand, ordered a crackdown on trucks carrying coal from illegal mines in remote parts under his charge. In at least one instance, local policemen were also penalised for their brazen collusion with the coal mafia.

“Illegal mining is a key source of income for the Maoists,” said Meena, conceding that it was difficult — if not impossible — to put a figure on the size of the annual Maoist budget.

In 2010, the Intelligence Bureau came up with a much larger all-India estimate of Rs. 1,500 crore.

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A year earlier, former Chhattisgarh police chief Vishwaranjan guesstimated that the Maoist budget was closer to Rs. 2,000 crore while chief minister Raman Singh recently put it at Rs. 1,000-1,200 crore.

A senior government official associated with anti-Maoist operations suggested much of this was an exaggeration and that the actual amount could hover between Rs. 140 crore and Rs. 250 crore.

Researchers at the security think-tank Institute for Defence Studies and Analyses — that conducted the study — tried to unravel some of the mystery surrounding Maoist finances.

The Central Committee of the CPI (Maoist) fixes the annual amount to be collected at an all-India level in consultation with various levels. The zonal committee then conveys the decision on the amount to be collected from each source.

In mineral-rich Jharkhand — one of the biggest sources of funds for the rebels — police officers have noticed that Maoists generally collect 7% as levy from all development works from contractors in the areas under their dominance.

A similar figure — 7-10% levy — is cited as the rate for industrial and mining companies.

Often, the armed guerrillas don’t need to come into the picture at all.

“Usually, an over-ground member of the outfit is deputed to collect the money,” the study says. Each level retains some amount for its expenses, before sending its collections to the next higher level.

Home ministry officials in Delhi — that has been struggling to come up with ways to block the flow of funds to the Maoists — concede that choking the Maoists’ extortion industry is a big challenge for the security establishment.

So it was no surprise that when the chief ministers of Maoist-affected states met in June, this was one of the key points of discussion.

“It may be difficult to completely cut off their supply of funds but it is possible to curb the flow,” said the IDSA’s PV Ramana. This will be a very important element in the counter-Maoist action plan.

With inputs from Ranchi, Patna and Raipur


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