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Ways And Means to Choke Maoist Finances

Dr. P. V. Ramana was Research Fellow at Institute for Defence Studies and Analysis, New Delhi. Click here for detail profile.
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  • May 11, 2017

    “Effective choking of fund flow to LWE [Left Wing Extremist] groups”, also known as Naxalites, and especially to the Communist Party of India (Maoist), or Maoists in short, was reportedly discussed and emphasised at a review meeting on LWE/Naxalite affected States chaired by the Union Home Minister in New Delhi on May 8, 2017.

    It is estimated that the Maoists might be extorting anywhere between Rs 140 to Rs 160 crore annually from a variety of sources. These sources include government works and schemes, industry and businesses, social institutions, infrastructure, people, membership fees, supporters/sympathizers, revolutionary taxes in cash and kind, etc.

    Through a consultative process involving various levels, the Central Committee of the CPI (Maoist) fixes the annual amount to be collected at the all-India level. The Zonal Committee appears to be the basic unit responsible for conveying the decision on the amount to be collected from each source. In effect, money is collected at all levels beginning with the Area Committee. In Jharkhand, there have been instances where the source has been informed of the amount to be paid, money left at the source itself, and collected at a later date, as and when the need arose. The Armed Squad need not necessarily go to collect the money. Usually, an over-ground member of the outfit is deputed for this purpose. These could be a member of the Krantikari Kisan Committee, Krantikari Mahila Committee, a contractor or an NGO, or any other designated person. At each level, there is a designated person who may be called treasurer in-charge.

    Besides, the Maoists have conceived ingenious ways to store money and ensure its safety. They had learnt their lesson the hard way. Because of lack of adequate precautions in the past, there were instances of money placed in sacks and stashed in dug-up dumps in the forest getting eaten up by termites. Now, currency notes are neatly packed in multiple layers of polythene and placed in a metal box, which is then dropped into a sintex tank that is stored in dumps in Maoist safe areas. In Jharkhand, as a former Director General of Police told this author, there have been some instances of money being deposited in banks. These could not, however, be investigated to their logical conclusion because the banks refused to cooperate citing privacy.

    It is also learnt that big amounts are being kept in the charge of platoon commanders to meet the immediate requirements of platoon members and thus maintain high morale. Further, some of the money has been converted into gold biscuits. At one point, at the peak of their movement in 2003, the North Telangana Special Zonal Committee (NTSZC) had 562 gold biscuits in its possession. To protect dumps, the precaution suggested is that these should be located in areas that are (a) less frequented by the security forces, (b) guerrilla bases, or (c) bastions where people’s support is very strong.

    There is no evidence yet to suggest that the Maoists are investing money in businesses or in the stock market. However, some amounts have been given to realtors to be reclaimed when the need arose. Another way of storing money is leaving it in the custody of trust-worthy sympathizers in rural/urban areas with two members at each level of the hierarchy being made aware of the place/person involved in safe-keeping the money.

    Surely, considerable amounts are being spent on acquiring weapons, ammunition and explosives from the grey arms market, while some money is also being spent for the daily needs of the armed cadre and running the war machinery, as well as expanding it. A small portion of the finances is being spent on propaganda and development work in base areas where the Maoists are running a parallel government, which they term Janatana Sarkar.

    It is difficult, if not impossible, to completely clamp down on Maoist finances. However, it is possible to restrict the flow of money into their coffers. Some of the measures that could be considered include:

    1. Closely monitor known sources of finance, including big industry.
    2. Monitor Maoist conduits/front men and intercept their telephone lines.
    3. Register criminal cases against sources of finance, irrespective of their social/economic standing.
    4. Encourage the victims/sources of finance to inform the security forces when extortion notices are served, and, through example, instil confidence in them that they shall have the protection of the state machinery.
    5. Ruthlessly crack-down on illegal mining and timber felling.
    6. Find ways to make the Revolutionary People’s Committees (RPCs) dysfunctional, and then get them dissolved.
    7. Ensure photographic evidence of the completion of development works and make on-the-spot inspections. Strengthen the social audit mechanism.
    8. Mines, forests, land/revenue records need to be rectified and made accurate.
    9. Penalize government servants paying extortion money.
    10. Tribal women are quite enterprising. Promote entrepreneurship among tribal women with a view to weaning them away from the Maoists.
    11. Create a separate wing within the intelligence apparatus in each State to exclusively monitor the flow of money.
    12. Maintain surveillance on bank accounts of suspects.
    13. Tighten the Public Distribution System (PDS) to halt leakages to the Maoists.
    14. The MHA could set-up a Special Investigation Team (SIT) to track down and arrest the persons responsible for providing finances to the Maoists with a view to restricting the flow of funds.
    15. Initially, the SIT could focus on two sectors that provide the largest source of funds to the Maoists, namely the mining sector and PWD.

    Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.