In India, it is money and not revolution that flows from the barrel of a gun. If Chhattisgarh’s police chief Vishwa Ranjan is to be believed, Maoists in different parts of India extort as much as Rs2,000 crore annually from businesses. Most of it comes from iron ore and coal dealers, road contractors and tendu leaf suppliers.
Rajan said that of this amount, roughly 20% is siphoned off by low-ranking outlaws, and the remaining 80% goes to the Maoist top brass. Given that investments in weapons, publications for propaganda and other assorted equipment cannot account for more than a couple of hundred crores, this is a phenomenal return on invested capital.
There are, of course, a few hiccups. There is risk of death to those in the business, and the trade is unlawful.
That apart, the lesson here is that absence of transaction costs, bureaucracy and taxes mostly has turned a small investment into a money-spinner. Imagine what legitimate businesses could do if the government did not intrude.