July 9, 2009 / 10:51 AM / in 11 years

Maoists extort $60 mln/yr in mineral-rich state

RAIPUR, India (Reuters) - Maoist rebels are extorting up to $60 million annually from business and industry across Chhattisgarh, home of one of India’s largest mineral reserves, the state’s chief minister said on Thursday.

Security personnel train at a counter-terrorism and jungle warfare school in Kanker, about 140 km south of Raipur March 19, 2007. Maoist rebels are extorting up to $60 mln annually from business and industry across Chhattisgarh, home of one of India's largest mineral reserves, the state's chief minister said on Thursday. REUTERS/Parth Sanyal/Files

The Maoists have recently stepped up attacks against police, officials and civilians away from remote rural areas and closer to towns and cities across India — a worry to potential investors as the country grapples with the global slowdown.

“Maoists extort a whopping sum of at least 250-300 crore rupees ($50-60 million) annually in Chhattisgarh,” chief minister, Raman Singh, told reporters.

State business leaders and politicians are jittery over Chhattisgarh, whose violence-wracked Bastar region is home to 20 percent of India’s iron ore stocks and has attracted big hitters like Tata Steel and the Essar Group.

The extortion operation stretches from the state’s southern tip near Bastar to the northern area of Surguja, which is rich with coal, he said.

The rebels demand cash from traders of Tendu patta (leaves), used to make hand-rolled cigarettes, mining firms, contractors and transporters, he said, adding many are scared to go to police.

The Maoists, who say they are fighting for the rights of poor farmers and the landless, feed off local resentment against industry and government in one of India’s least developed states.

Businesses and politicians fear the mineral reserves in Bastar, where Tata Steel plans to build a steel plant, could fall into Maoist hands within a few years.

Steel is a key sector to India’s economic growth, which has slowed to around 7 percent compared to 9 percent or more per year before the global financial crisis bit.

Prime Minister Manmohan Singh has said the Maoist army of 22,000 fighters is one of the greatest threats to India’s internal security.

The rebels killed 721 people, including members of the security forces, in 2008, mainly in India’s eastern and central states known as the “red corridor”, up from 696 in 2007.

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