The New Delhi based Institute for Security and Defence Analysis has published an insightful breakdown into how the Naxalites of the Communist Party of India, aka the Maoists, acquire and spend their funding. While some of the estimated INR140cr (USD43m) they receive stays in cash, some is invested in real estate and some is deposited into bank accounts. ISDA analysts have also not ruled out the possibility of the Naxalites receiving foreign aid.
The Naxalite Maoists in India are a paramilitary group, born in West Bengal and now predominant in poor areas of Chhattisgarh, Odisha and Andhra Pradesh and which supports a radical, left-wing, Maoist political ideology and aims to overthrow the government of India. The group is an illegal entity, banned in several states and nationally under the Unlawful Activities (Prevention) Act in 2009. The ban means that Maoists can be arrested, they are barred from holding public meetings, their offices – if found – will be sealed upon arrest and any assets will be frozen.
Despite their treatment as a terrorist organisation, the Naxalites have a rigorous structure of accountability. The Maoists adopted a protocol in 2007 called “Our Financial Policy” which lays down in detail where funding emanates from, how money is to be spent and where it is to be kept. Funds are collected from various sources, including:
- Government Works and Schemes
- Industry and Businesses
- Social Institutions
- Membership Fees
- Revolutionary Taxes in cash and kind
- Fines on Defaulters
Corrupt officials, the Public Works Department, contractors, the mining industry and the collection of tendu leaves, which are used to make the traditional Indian “beedi” cigarette, have all generated funds for the Maoists. Maoists collect a “revolutionary tax” from people, local businesses and families. This can be in the form of extortion and people may feel threatened if they do not pay. There appear to be levies imposed on anyone who is late with a payment. This week, reports hit the Times of India about Naxalites demanding INR2lakh (USD3,226) from a doctor in Bihar and threatening him with serious consequences if he does not pay.
To combat extortion and the payment of “revolutionary tax”, the Indian government is ran a radio campaign. In September last year, All India Radio – the national radio station – started to play jingles and advertisements urging villagers and indigenous community groups to distance themselves from the Naxalites and join the mainstream.
There is no evidence yet to suggest that the Maoists are investing money in businesses or in the stock market. The report author claims that funds are spent on the black/gret market to acquire weapons, ammunition and explosives.
The organizations sprawling and secretive nature forces it to manage liquid assets carefully. At any one time, at any level of the organization, only two people will know where the money is stored. Cash is kept with trust-worthy “fronts” who sympathise with the group, funds are given to real estate agents presumably to invest or secure as well as hold. ISDA reports that some Maoists have bought vehicles for supporters, they have converted money into gold “biscuits” and pack large amounts of notes into polyurethane bags which are kept in metal boxes, in tanks and stored in forests. There have also been cases of depositing funds into bank accounts, a senior military officer told ISDA.
Source: ISDA report