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Do private companies fund Naxal

movements in India

BGS Project Report

Term III | PGDM 2013-15
Great Lakes Institute of Management, Chennai






Submitted by
Rachit Bhatnagar
DM 15244



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TABLE OF CONTENTS

Introduction 3
History 4
Hypothesis 5
Methodology 5
Are Private Companies funding Naxalism 5
Conclusion 7
References 8

















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INTRODUCTION -
The terms Naxal, Naxalite and Naksalvadi are used in generic sense to refer to
various Communist guerrilla groups huddled in Indian territory, most of them
being under the influence of CPI-Maoist. The term Naxal derives its origin from
Naxalbari, a village in West Bengal where the movement commenced from.
Naxalites are considered to be far-left radical communists who lend support to
the Maoist political sentiment and ideology. Their origin can be traced back to
1967 when the Communist Party of India(Marxist) was forced to split, leading to
the formation of the CPI (Marxist-Leninist). Initially, West Bengal served as the
epicenter while in the later years the movement spread its tentacles to the lesser
developed areas of Odisha, Chattisgarh, Andhra Pradesh. The movement grew
manifold over the years. The past ten years saw the movement garnering
support from displaced tribals fighting against exploitation by local officials and
Indian corporations, believed to be corrupt people.
In 2006, Indias Research and Analysis Wing i.e. RAW estimated that over 20000
armed-cadre Naxalites were driven into operation in addition to the 50000
regular cadres. The growing influence prompted Indian PM Manmohan Singh to
declare their organization to be the most serious internal threat to Indias
security and referred to them as ultras.
The Indian Central Government in February 2009 announced a nationwide
initiative called the Integrated Action Plan or the IAP for co-ordinated
operations aimed at dealing with the issue of Naxalites in all affected states. The
affected states were namely Chattisgarh, AP, Maharashtra, Jharkhand,
Karntaka, UP, Bihar and West Bengal). Importantly, this plan entailed funding for
economic development projects at the very grassroots level in Naxalite-
affected areas as well as increased special police funding to combat Naxalite
influence in these areas.
The Naxalites in 2009, were actively involved in approximately 180 districts in ten
states of India. A year later, in August, after a first full year of implementation of
the IAP program, Karnataka was removed from the list of affected states. July
2011 saw the number of Naxalite-affected areas, reduced to 83 districts in 9
states (including 20 other districts). In December 2011, it was reported that the
number of Naxalite-related deaths and injuries had gone down by nearly half.


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HISTORY
The term Naxalite draws its origin from Naxalbari, a small village in the state of
West Bengal where a section of the CPI-M led by KAny Sanyal and Jangal
Santhal started a violent uprising in the year 1967. On May 18
th
1967, the Siliguri
Kishan Sabha with Jangal as its president, declared their support for the
movement started by Kanu Sanyal and the readiness to adopt the struggle
helping redistribute land to the landless. The very following week saw a
sharecropper near Naxalbari village being attacked by the landlords men over
a land dispute. On 24
th
May, when the police team arrived to arrest the peasant
leaders, they were ambushed by a group of tribal folk led by Mr. Santhal and a
police inspector was killed. This event was the fire-starter and encouraged
Santhalis and other poor people to start attacking local landlords.
These conflicts reflect the failure of implementing the 5
th
and 9
th
schedules of the
Constitution of India. In theory these Schedules provide for tribal autonomy in a
limited form with regard to exploiting natural resources on their earmarked land,
eg mining and pharmaceutical and land ceiling laws, thereby limiting the land
to be under the possession of landlords. It also sought to distribute excess land to
labourers and landless farmers. The caste system was another important social
aspect in these conflicts.
Mao Zedong was the one who provided ideological leadership to the working
of the Naxalbari movement, advocating the lower class tribals and Indian
peasants overthrow the government and the aristocracy by force. A large
number of urban elites sought inception into this ideology which spread through
the writings in Historic Eight Documents which formed the basis of the whole
ideology.
At the time, leaders as part of this revolt were members of the CPI(M) who
joined a coalition government in the state of Bengal, just a few months prior.
Leaders like Hare Krishna Konar, the erstwhile Land Minister had been trumpeting
revolutionary rhetoric, suggesting militant confiscation of land was an intergral
part of the partys programme. However, CPI(M) did not approve of the uprising
and all the leaders and a few Calcutta sympathizers were expelled from the
party.
Subsequently, November 1967 saw this group under the leadership of Sushital
Ray Chowdhury, organize the All India Coordination Committee of Communist
Revolutionaries or the AICCCR. The country saw many violent uprisings in several
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parts. On April 22 1969, which was also Lenins birthday, the AICCCR conceived
the Communist Party of India (Marxist-Leninist) (CPI(ML)).
Practically, nearly all Naxalite groups trace their roots to the CPI (ML). An
offshoot from this was the Maoist Communist Centre, which assumed form out of
the Dakshin Desh group. The MCC later joined forces with the Peoples War
Group to form the CPI (Maoist). There was a third offshoot, that comprised of the
Andhra revolutionary communists, mainly seeking representation by the
UCCRI(ML), following the legacy of T. Nagi Reddy.
During the 80s, the movement was fragmented involving disputes among
factions. By 1980, around 30 Naxalite groups were active boasting of a
membership of 30000 Naxalites.
HYPOTHESIS
H0: Private companies fund Naxal movements in India
METHODOLOGY OF RESEARCH
Secondary Research, mostly internet.
ARE PRIVATE COMPANIES FUNDING NAXALISM?
There is no plausible evidence to suggest that naxalite groups in our country are
seeking financial assistance from foreign countries. However, the possibility of
some organizations of the CPI (Maoist) clandestinely obtaining foreign funds
cannot altogether be ruled out. The Indian Government is closely monitoring the
situation.
Naxal outfits are milking mining industries, corporate houses and tendu-patta
contractors in order to fund their extremist activities, the government intimated
the Parliament. Answering a Parliament question, the Union Minister of State for
home, Mr. R.P.N. Singh indicated that some fronts of the CPI (Maoist) may also
be receiving funds secretly from foreign sources.
To a specific query on Naxal outfits financial status, Mr. Singh said that though
the finances couldnt be quantified, a study by the IDSA, Delhi, has placed the
annual collections at not less than Rs. 140 crores from a wide spectrum of
sources.
The minister said that the primary monetary source was sought by extortion from
the tendu-patta contractors (used to manufacture bidis) and from infrastructure
and development contractors, levy from business personnel and corporate
houses besides robbing banks and other private/public property.
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The home ministry, stating that the Centre is responsible for monitoring the Naxal
situation demanded the states to initiate legal action in matters of extortion by
CPI (Maoist).
Citing the Administrative Reforms Commissions sevent report, Singh said that it
had recommended the establishment of anti-money laundering and anti-
extortion cells in the police of the affected regions. Even the mines ministry
agreed upon this face. Besides, the states have also been advised to curb the
flow of funds directed to the Naxals from tendu-patta collection by ushering in
certain changes in the policy.
Law and Order is dealt by the State Governments as it is a state subject. The
Central Government also monitors the situation, thereby supplementing the
efforts of the State Governments. Crimes related to fund collection by naxalite
groups are investigated, registered and prosecuted by the State Governments.
Naxals are paid in order to buy peace
The claims by the home minister about the industrial houses and big corporates
supporting the Naxal movement is baseless and absurd. The corporate houses
can never fund the Naxals. There might just be a chance at some point where
some corporates might have given money to the Naxals in order to buy peace.
There are several instances wherein the Naxals have kidnapped industrialists or
have caused harm to the employees of the industries. It is therefore, the
responsibility of the government to provide for security in these cases, which it
fails to do.
Under these circumstances, the corporate houses are forced to offer monetary
gratification to keep the employees safe. If this is interpreted as funding, then it is
an absolutely wrong claim by the home minister.
By funding Naxals, the business will suffer
Corporates wont gain anything out of funding the Naxalites. Industrialists on the
other hand wont prefer supporting them, as they extort money. Both the
corporates and industries have to pay the government and the Naxals and
hence, funding the movement would give rise to irrecoverable loss, thereby
affecting their business.
They might be paying funds in order to ensure peace and security for their
industries. If this is interpreted as funding by the minister, then it is a far-fetched
conclusion. However, the scenario would be clear only after certain
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investigations are carried out. Had the government carried out reforms to succor
the Naxals, the situation could have been in better control.
The rebels are getting money from road contractors
The claims by the home minister cannot be completely discarded as the
Naxalites have for long been getting money from beedi industries, road
contractors and more recently, mining industries.
However, unless these are proved in the court of law, the claims stand void.
A compromise is reached so that the Naxals do not disrupt the business if the
corporates agree to fund them. But the government cannot be entirely blamed
as the corporates are capable of gratifying them in lieu for peace.
Industries chip in to fulfill basic needs
If the government fails to succor the needs of the deprived Naxals, they would
have to rely upon another entity for daily necessities. If in such a case, corporate
houses provide a helping hand, then it cannot be claimed that theyre funding
Naxalism, per se.
The daily necessities of people living in this area are limited and include clean
drinking water, approachable roads, electricity, primary education etc. The
government has failed in its duties to address their grievances. This is where the
corporate houses chip-in and fulfill the basic needs as a part of their corporate
social responsibility. If the home minister accuses them of funding Naxals, then I
would say its an exaggeration. The corporates are clearly not providing Naxals
with arms and ammunition to fight the government.
CONCLUSION
Though there is no concrete evidence that private companies and foreign
countries directly fund the Naxalites, but it is common fact that private
companies are funding Naxalites for their own protection and safety. This could
have possibly been avoided if the government was able to provide sufficient
security to the employees working in these regions. This can be attributed from
the fact that mostly PSUs, government officials etc. are attacked by the
Naxalites. With the recent arrest of Essar Steels GM Mr. J. S Verma for allegedly
funding Naxalites in Dantewada region of Chhattisgarh, we cannot deny that
private funding does take place. It is the question of ethical behaviour of private
companies and how each respective company perceives the funding. They say
it is for protection and safety while the government perceive it as an indirectly
funding the Naxal movement, which has been brandished as a threat to internal
security by the Prime Minister.
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Through this secondary research, it is inconclusive to validate the hypothesis that
private companies fund Naxal movement in India due to lack of concrete
evidence, but with the government and police working with the RAW, we might
soon be in a position to validate this hypothesis.
REFERENCES

The Hindu Business Line -
http://www.thehindubusinessline.com/companies/essar-steel-gm-arrested-for-
allegedly-funding-naxal-groups/article2490704.ece

Defence Forum India
http://defenceforumindia.com/forum/internal-security/33737-do-naxal-gets-
funds-arms.html

Wikipedia -
http://en.wikipedia.org/wiki/Naxalite