Crackdown on the red economy may be a tricky business
There was the announcement earlier this week of the formation of a joint task force comprising a mix of officers of the central and state-level intelligence services, tax and revenue intelligence officials and those of the National Investigation Agency. This group will monitor and squeeze Maoist funds.
Money of course talks even with Maoists, but to pick that premise up at the wrong end may dilute the effort.
Tracking Maoist funds, even those misappropriated by cadres and leaders—though more leaders than cadres, for sponsoring a relative’s education, buying property, and so on—has been an active protocol for security agencies in the states. Security satraps in New Delhi began to wake up to it in 2005-06 when Maoist attacks peaked.
A rebellion’s crucial components such as food, weapons, ammunition, healthcare, communication and propaganda make it a cash-and-carry enterprise. Residents in Maoist zones often part, voluntarily and otherwise, with support in shelter, intelligence input, recruits, food grain and food. The cash component typically comes from businesses operating in Maoist areas of influence, in a range from tendu-leaf and timber merchants to contractors building roads and bridges, transporters, owners of mines, ancillary operations. The works.
This is the Red Economy, parallel to the real economy and coterminous with the Black Economy. As a matter of necessity, rebels are no slouches when it comes to leveraging the profit motive of the running dogs of capitalism, even as they question capitalism itself.
Indeed, in interviews published in mid-2010, Alpa Shah, an academic with Goldsmiths, University of London, queried a Maoist leader about it. The rebel, who went by the nom de guerre of Gopalji, was frank. “In the areas of our struggle, we are the authority that is serving the people … We are using the funds to accelerate our struggles and we are using them in radical reform programmes.”
For such programmes, rebels have often claimed—indeed, so has the general secretary of Communist Party of India (Maoist), Ganapathy or Muppala Laxmana Rao—that such taxation is systematic. Larger operations are taxed more than smaller ones. They claimed funds for building schools and hospitals, excavating ponds and placing tube wells aren’t taxed. The rebel spokesperson told Shah: “We are not simply collecting money for private gain—that would be corruption.”
There are some notable examples of such “collections”. In mid-January 2014, police in Chhattisgarh arrested two local businessmen on the charge of being funds and logistics conduits for rebels. In late 2011, a contractor for Essar Group was arrested in Chhattisgarh with more than a million rupees in cash which he claimed he was carrying to the Maoists on behalf of Essar. The company shipped iron ore from Dantewada district—smack in the middle of the Maoist zone. A general manager with Essar was subsequently arrested on various charges, including that of sedition.
In June 2013, a senior executive with Llyods Steel, a contractor and a local village elder were killed in Maoist-affected Gadchiroli district of Maharashtra. The speculation ranged from Maoist rebels being upset over the company’s incursions into nearby iron ore-rich areas against local opposition; an example made to compel kowtowing to Maoist diktat; and, as a corollary, a rogue Maoist leader ordering the hit.
The difficulty of interdiction is precisely on account of the grey area give-and-take. Timber, mining and infrastructure are typically key result areas. A former head of anti-Maoist operations in Jharkhand told me of how business “mafias” have “a symbiotic relationship with the state as well as the Maoists.” He added: “It’s difficult to determine who is exactly what, and who is with whom. They are all hand in glove … business cannot operate in several of the areas without having such a relationship.”
Certainly, the Maoist cart isn’t bereft of bad apples—even from the Maoist perspective. But squeezing Maoist funds is a tricky business. Especially when Maoists are just another cog in the wheel that runs on what the Chinese call fragrant grease.
Root Cause focuses on conflict situations and the convergence of businesses and human rights and runs on Thursdays.