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The Maoist-Business Nexus

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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  • October 03, 2011

    News of business enterprises paying-up to the proscribed Communist Party of India (Maoist), or Maoists in short, keeps appearing on-and-off. A General Manager of Essar Steels was arrested in Karandaul, Dantewada district, Chhattisgarh, on September 25, 2011, for allegedly paying ‘protection money’ to the Maoists. Two others have been arrested in this connection. Reportedly, the police in neighbouring Orissa’s Malkangiri district are on the look-out for another Essar official following some evidence surfacing of his involvement too. Dantewada Superintendent of Police (SP), Ankit Garg, is reported to have said on September 30 that “Strong evidence has been found against Srinivas.”

    Essar has business interests in the Kirandaul iron ore mines in Dantewada district. Extracted iron ore is turned into slurry and transported to Visakhapatnam, Andhra Pradesh, through a pipeline and steel pellets are manufactured at the Essar unit in Visakhapatnam. The length of this pipeline is 564 km. “Given the per kilometre cost of laying the pipeline the total cost of laying it is Rs 5,400 cr”, the then Superintendent of Police of Narayanpur district, which is situated adjacent to Dantewada district, told this author in July 2007.

    In May 2007 the Maoists had blown-up three high tension (HT) towers in Narayanpur district leading to a total power failure for 10 days in Narayanpur and Dantewada. If the slurry is not removed from the pipeline within a certain period it would freeze inside the pipeline, thus rendering it useless. At that time, this eventuality was avoided. There have also been occasions when the Maoists destroyed the pipeline at some points along its length.

    According to the Union Ministry of Home Affairs (MHA) data, between 2008 and 2010, there have been a total of 365 attacks on infrastructure in different parts of the country in the various affected States, which include Andhra Pradesh, Maharashtra, Madhya Pradesh, Chhattisgarh, Orissa, West Bengal, Jharkhand and Bihar. The targets included Economic (24), Railways (54), Telephone Exchanges/towers (45), Power Plants (3), Mining (9), Transmission Poles (2), Panchayat Bhawans (31), School Buildings (39), Forest Roads, Culverts, etc. (158).

    There have been reports in the past of other businesses, too, meeting the extortion demands of the Maoists. According to a published report of December 2001, the Rajahmundry-based Andhra Pradesh Paper Mills was then paying 50 lakh per month to the Maoists. During a field visit in January and February 2002, this author was told by a senior police officer that a reputed industrial house which has business operations in Warangal district of Andhra Pradesh was then paying Rs. two crore annually to the Maoists alone; and six other Naxalite groups operated in the area.

    It is well known that in the various affected States kendu/tendu leaf (similar to beedi leaf) contractors and timber merchants pay to the Maoists in order to run their business smoothly. Those who pay-up extortion money to the Maoists include corrupt government officials, rich landlords, usurers, public works contractors and other businesses, chambers of commerce, big industries, as well as political leaders. In short, the outfit targets, for extortion, those who have ill-gotten wealth. Speaking to this author in July 2007, the then Director General of Police of Chhattisgarh said the Maoists annually collect an amount of Rs. 1,500 crore through extortion. And he added that these are estimates based on information gathered during the interrogation of some arrested top leaders.

    Businesses, especially industries, face a real dilemma. If they do not heed to the extortion demands of the Maoists, their personnel, property and the unit itself would be attacked by the Maoists. On the other hand, if the police detect their payments they can be booked! On one occasion, in Warangal district, the police registered FIRs against tendu leaf contractors for paying money to the Maoists.

    In the case of big industries, it is possible for them to isolate the Maoists by winning over the local population. Towards this end, they could undertake a number of activities that would benefit local communities –– as part of their Corporate Social Responsibility (CSR). Big industries would do well by beginning their CSR activities right from the time of entering into a MoU with the government. Also, the CSR budget could be catered for in the over-all cost of the project.

    The activities that could be undertaken include: free educational facilities for local adivasi children in schools, colleges and polytechnics; school/college buildings, welfare hostels; cash awards for meritorious students; hospitals and mobile dispensaries; create a talent pool that could be later employed in the industry; lay bore-wells; and construct all-weather roads.

    Mao Tse Tung once said, “If we attend to these problems, solve them and satisfy the needs of the masses, we shall really become organizers of the well-being of the masses, and they will truly rally round us and give us their warm support… The women want to learn ploughing and harrowing. Whom can we get to teach them? The children want to go to school. Have we set up primary schools? The wooden bridge over there is too narrow and people may fall off. Should we not repair it? Many people suffer from boils and other ailments. What are we going to do about it? All such problems concerning the well-being of the masses should be placed on our agenda. Discussions should be held, decisions reached, actions taken and results checked up.”

    Thus, by winning over the people it is possible to erode the support base of the Maoists. When the Maoists are driven away by the people themselves, the big industry would be free of the concerns of paying ‘protection money’ for ensuring security.