September 28, 2020
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Red Lights For FDI

Apart from the obvious human and social costs, the economic impact of the Naxalite rampage is potentially devastating. If the current trend in the proliferation of violence continue, India's target of US$ 15 billion in FDI in the year 2005 may not ma

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Red Lights For FDI

"We will come back soon". This was the message left in Telugu by the Communist Party of India-Maoist (CPI-Maoist) activists after their attack on the 9th Battalion of the Karnataka State Reserve police (KSRP) camp on the night of February 11.

Six police personnel and a civilian were killed and five others injured when an estimated 300 Naxalites, including some 50 women, attacked the KSRP camp with hand grenades, bombs and AK 47 assault rifles at Venkammanahalli under Pavagada revenue division of Karnataka's Tumkur district 130 kilometers from the state capital, Bangalore.

They took away 10 self-loading rifles, while six unexploded bombs and some grenades were subsequently recovered from the compound. A landmine was also spotted by a police rescue team at Kyatacherlu, an adjacent village, under a bridge on the main road leading to the spot where a tractor had been parked to block the security force (SF) movement.

After the Naxalites exchanged fire with the police at Venkatammanahalli in April 2003, a platoon of the KSRP has been deployed in Tumkur as the extremists were frequenting the border villages.

The attack came five days after the police shot dead a top Naxalite leader, Saketh Rajan, and his associate in the Kallugudde forests in Chikmagalur district on February 6. Interestingly, the Chief Minister of Karnataka, Dharam Singh, had ordered an investigation into Rajan's killing after human rights activists charged the police with faking the encounter.

Over the past five years, Naxalite activities have increased in the districts surrounding Bangalore city - India's 'Silicon Valley'. Both Tumkur and Kolar districts share borders with Andhra Pradesh, and are situated to the North and East of Bangalore, respectively. The Naxalites have been active in both districts since the 1980's. They also have a strong presence in the Pavagada taluk (revenue division), 130 kilometers from Bangalore, where leaders such as Yenti Muthyalappa and Kurubara Banadiah contributed to the growth of the movement.

To the West of the city, the Naxalites have increased their activities in the Malnad region of the Western Ghats, comprising five districts: Shimoga, Udupi, Chikmagalur, Dakshin Kannada, and Hassan. Though initial Naxalite activity was concentrated in Tumkur, Kolar, Bidar, Gulbarga, and Raichur districts, they have progressively extended their base in the Western Ghats.

In June 2001, coordinated agitations by various organisations, including the Kudremukh Rashtriya Udyana Virodhi Okkuta, Karnataka Vimochana Ranga, and Nagarika Seva Trust, against the eviction of tribal people from the Kudremukh National Park (KNP) area helped the then People's War Group (PWG) to establish its base by taking up the cause of the tribal people. In addition to the park issue, 'exploitation' by the landlords was another issue that helped the Naxalites to expand their activities.

The southern part of Bangalore city shares its borders with the Dharmapuri district of Tamil Nadu, which has been under Naxalite influence for the past two decades. While the movement was substantially contained through the 1980's, it had regained strength by November 2002, when the authorities conducted a major crackdown. In addition to Dharmapuri, the Naxalites have a presence in at least another three districts in Tamil Nadu: Salem, Coimbatore and Madurai. On October 10, 2004, the Tamil Nadu Government had banned the PWG under the Criminal Law Amendment Act, 1908, in order to protect its territories from infiltration by extremist cadres from neighboring states such as Andhra Pradesh and Karnataka. Dharmapuri's strategic location appears to be a compelling factor in the Naxalites' choice of the district for their operations.

Following the killing of six of its policemen at Venkammanahalli, the Karnataka Government has identified 33 police stations across 10 districts in the State as "hyper sensitive and vulnerable" to attack by the extremists. Of these, 23 are spread across seven districts - Bidar, Gulbarga, Raichur, Bellary, Chitradurga, Tumkur and Kolar - which border Andhra Pradesh. Police Chiefs of these districts have been directed to declare a red alert in the areas within their jurisdiction and to fortify police stations. The remaining 10 police stations are spread across Shimoga, Chikmagalur and Udupi districts in the western part of the State.

The economic impact of the Naxalite rampage is potentially devastating. Prime Minister Manmohan Singh, on a visit to Bangalore on February 12, expressed concern over the growth of Naxalite activities in the country and accepted that Left Wing extremism was gaining momentum in central India. He noted, further, that these were the "areas where the greater part of India's mineral resources, hydroelectric and other resources are located". US Ambassador to India, David Mulford, recently expressed concern that the growing Naxalite violence in the country could hit the inflow of foreign investments in the country. 

Among India's southern states, Tamil Nadu tops the list for foreign direct investment (FDI), followed by Karnataka. Unsurprisingly, despite the hype about 'Cyberabad', Andhra Pradesh is not in the list of top five FDI destinations in the India. Karnataka, the second largest FDI recipient in the country, approved 934 FDI proposals worth Rupees 7,826 crore (Rs 78.26 billion) during the year 2003. However, it slipped to the fourth rank in 2004. 

If the current trend in the proliferation of violence continue, India's target of US$ 15 billion in FDI in the year 2005 may not materialize. On February 9, 2005, Union Minister of Commerce & Industry, Kamal Nath, sought FDI into the country's sluggish infrastructure sector and reiterated Prime Minister's assessment that India would require an investment of at least US$150 billion over the next 5-10 years to upgrade its infrastructure. According to the Federation of Indian Chambers of Commerce and Industry (FICCI) FDI Survey, 2004, "While the outlook for FDI inflows into India in the near to medium term remains positive, security and terrorism concerns weigh heavily on the minds of foreign investors."

In addition to the activities of Indian Naxalites around Bangalore, the presence of the Young Communist League (YCL), a front organisation of the Communist Party of Nepal - Maoist (CPN-M) appears to be active in Bangalore. Slogans such as "Long live YCL Nepal" and "Maobad Zindabad (Long Live Maoism), Communist Party of Nepal" have been found plastered on the walls in various localities, including the Lalbagh West Gate. Sources indicate that YCL has been collecting funds in India and was mobilizing Nepali students and workers for its activities. Ram Charan Shresta, a Kathmandu-based ideologue of the YCL, who is also believed to be linked with Pakistan's Inter Services Intelligence (ISI), coordinates the Indian operations. A former Chief of the Karnataka Police Anti-Terrorist Squad has claimed that the Nepali Maoists were in league with the Naxalites of the PWG. Such linkages and activities, while they are yet to translate into violence, can only further undermine investor confidence in Karnataka, and particularly in Bangalore.

Unfortunately, there appears to be little coherence in India's response to this challenge, and the wider problem of the rampaging growth of Left Wing extremism across large parts of the country. Over the past year, the Naxalites have been extending their areas of activity at the rate of an average of two districts each week, and have gone from just 55 districts in nine states in November 2003, to as many as 170 districts in 15 states by February 2005. In just the past 44 days, 106 persons - 32 civilians, 32 security personnel, and 42 extremists - have been killed in Naxalite-related violence, much of it directly connected with the call for a boycott of the Assembly elections in Bihar and Jharkhand. In Jharkhand, some of the Naxalite affected districts experienced a voter turnover of just 29 per cent, among the worst ever in the State. Nevertheless, the official response continues to be lack-lustre, and Defence Minister Pranab Mukherjee on January 29, had said that the Naxalite violence in the country was "manageable".

But efforts to 'manage' this 'manageable' problem are riven with contradictions. In Andhra Pradesh, the Greyhounds, a special force of the Andhra Pradesh Police, had cornered CPI-Maoist State secretary, Ramakrishna, and a number of other Naxalite leaders in the Nallamala forests in the Prakasam-Kurnool district border on February 3, 2005. Some frantic lobbying by sympathizers and front organizations in Hyderabad resulted in political intervention that forced the compliant Police to pull back and allow the extremists to walk free. The nexus between political parties and the Naxalites has been crucial to the long-term survival of this extremist movement, as well as to its extension over widening territories.

Prime Minister Manmohan Singh has now issued a call for a 'comprehensive strategy' to tackle the Naxalites. Regrettably, there is little evidence that the present regime at New Delhi or, for that matter, in any of the capitals of the affected states, have the political acumen or strategic foresight to deal effectively with this growing challenge.

Nihar Nayak is Research Associate, Institute for Conflict Management. Courtesy, the South Asia Intelligence Review of the South Asia Terrorism Portal

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