On September 24, a parliamentary committee told the Government of India something officers of the government have known all along: that its own funds are finding their way into Maoist coffers. It's a bitter truth the government does not want to hear.
After all, increasing development funds is one of the two "prongs" in its campaign to recover control of Maoist areas.
A Rs 13,742 crore 'integrated action plan' for 60 Maoist — affected districts in nine states is currently pending before the Union Cabinet for approval. And there is already a clamour among states to claim more and more of the Naxal fund pie.
The insurgency bonanza
Bihar is demanding Naxal-affected 'status' for all its 33 districts. Orissa seeks to add 10 more, and Andhra Pradesh seven more districts, to the Naxal affected list. West Bengal wants inclusion of Purulia and Bankura districts, and Uttar Pradesh wants Mirzapur and Chandauli to be brought into the special Naxal affected development fund net.
How much of the money would go to development — roads, education, health, electrification and irrigation are the target areas — and how much to Naxal coffers is the question.
"In these vast remote tracts, insurgents run the local administration. Their writ runs large. No one notices what is going on. Crores are being poured into these areas in the name of development, which end up in the coffers of insurgents and Naxalites", says Adhir Ranjan Chowdhury, Lok Sabha MP from West Bengal's Murshidabad district who was part of the committee.
Last month, addressing a meet of state police chiefs, Home Minister P Chidambaram had noted, "Large scale diversion of development funds to the militants gives them easy access to critical resources which helps them recruit new cadres as well as procure arms".
At the grassroot level, there is no way the government can stop the diversion. It simply doesn't have the mechanisms in place to plug the leaks. This is true for conflict areas across the country.
A young intelligence officer on a visit to the office of a district commissioner in Nagaland was eyewitness to the situation.
"In the span of an hour in the DC's office, representatives of two insurgent outfits dropped in to say they needed funds for a few projects in the district. The DC was not in a position to say no."
Government officials in remote areas are rarely in a position to say no. A retired official of the Comptroller and Auditor General's office recalls going on an audit to a remote outpost in Mizoram.
He discovered pilferage of government funds. At night, he was visited by three men with guns who offered him liquor and requested him to not write anything adverse. The message was clear: he could take the liquor, or a few bullets.
Mizoram is no longer affected by insurgency, and has not been for decades.
Says G N Sunder Raja, principal accountant general, Andhra Pradesh, "We do have a system of verification which means we check relevant documents. We do what we can with our available resources in the face of severe manpower and logistics problems. But functioning in extremist-affected areas is a serious problem."
A system that leaks
In areas with active insurgencies, the diversion of public funds to insurgent coffers has become part of the system. Perhaps the best documentation of this to date has come from the first chargesheet filed by the National Investigation Agency.
In November last year, the agency charted out how "huge sums of money from funds available with the North Cachar Hills Autonomous Council were channelised through hawala operators in Guwahati and Kolkata to reach arms smugglers who smuggled in arms and ammunition and supplied it to DHD(J) (Dima Halam Daoga, a militant outfit) for them to commit acts of terror and violence and to wage war against the state".
After initially going into denial mode, Assam chief minister Tarun Gogoi only recently accepted that development funds had indeed been siphoned off. Efforts are gaining ground to entrust the case to the Central Bureau of Investigation.
"We act on the basis of facts. There were allegations that public money was indeed finding its way into the hands of some insurgent groups in Assam's North Cachar Hills. Those cases are being investigated by the CBI and NIA", says U K Bansal, special secretary in the Home Ministry.
Security analyst Ajai Sahni says that, "Public money meant for development is falling into those hands that are hell-bent on destroying the nation is a well-documented fact. Intelligence reports are full of how anti national elements are acquiring public funds."
Power flows from the gun
In the remote areas, it is people with guns who have control over life and death, Sahni points out. Where there are plenty of people with guns, such as Maoist dominated districts, or parts of the Northeast and Kashmir, the money follows the guns.
"In a situation where security forces fear to tread, what resistance can the common man offer?" asks parliamentarian Chowdhury.
"Block development offices have been blown off. The BDOs have no option but to follow the diktats of local Naxal leaders. In most cases, they do not even venture to the area under their jurisdiction. On paper, everything is fine, but the reality is totally different", he says.
A senior official of the Planning Commission, who spoke on the condition of anonymity, says, "Go to Kashmir and see for yourself how many development schemes have been implemented. They exist only on paper. The money is siphoned off by public officials, and politicians, and militants are also a party to the loot of the exchequer. And because of the situation, no accountability exists, there is no monitoring. There is open loot going on."
The loot will probably ensure that the state continues to arm and feed the rebellions against itself for years to come. Unless something is done to stop it.
To stop the loot
EN Rammohan, who led the one-man commission of enquiry into the Dantewada CRPF massacre and policed extensively in Jammu and Kashmir and the Northeast, has an idea: "Allot 10 per cent of the funds for a project and after it is utilised send an audit party from a distant state to audit the work. Verify the extent of work done and check if 10 per cent of the funds have reached the ground. After this, allot the next 10 per cent, and send another audit party from another state, and so on."
If the audit parties go with security cover, and the authority to inspect actual works in addition to the account books, it might work. It just might.