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Nishant Turan asked: How do Naxalites financially sustain their movement? What are their sources of funding?

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  • Vivek Chadha replies: Financing of terrorism usually fits into three categories. The first is state sponsored, wherein an external state sponsors and funds terrorism to facilitate the achievement of its strategic aims. This is essentially the case in J&K. The second is globalisation of terror finance, where a group raises funds employing the power of modern day inter-connectivity which links the financial systems of the world. It makes funds raised in Europe as convenient and accessible as those raised locally. The LTTE exploited this mechanism in the past. The third category is privatisation of terror finance. In this case, a group raises funds locally and essentially on its own. The Naxalites fall in the third category, as do most insurgent groups in the Northeast.

    The Naxalites are known to have a very elaborate taxation system, wherein every produce in the area is taxed, from tendu leaves to agricultural produce. They also resort to extortion from vehicles, businesses and households. Every type of vehicle has a fixed rate, which is systematically collected in the region. A very large percentage of their income also comes from extortion of large business houses which have their business interests in the region. These could vary from mining companies to manufacturing units. Reports have indicated that illegal mining carried out by locals is also taxed. There are also reports, though yet to be verified, regarding raising of funds through taxation of opium farms. The extent and scale is still a matter of speculation, however, given the inaccessibility of the area, it does pose a serious threat to the state agencies. The funds collected are sent to the Central Committee, with a small percentage allocated for the operational and administrative support of the local cadres