The recent terrorist attacks in Mumbai have sent a chill down the spine of the Indian economy. The Bombay Sensex fell the next day and there is apprehension about what the government is doing to fob off such attacks in the future. Internationally also, India's preparedness for such attacks and the state of its intelligence collection are going to be watched by investors and tourists.
Ever since the 1990s there have been sporadic attacks by terrorist groups that have claimed innocent lives in India. In fact, the economic success that India is proud of today can be ruined if such terrorist violence continues. Most of these are from groups with ideology and are masterminded by educated people, but recruitment is mainly from youth who are disgruntled and often without jobs and education. These groups, which may remain dormant, can become active to catch public attention anytime. New indigenous groups are being formed all the time. There is imported terrorism also.
The rise in terrorist acts in India has been noted by the Institute of Economics and Peace, a Sydney-based think tank, which has ranked India as 135th out of 153 countries as one of the least peaceful nations in a recent survey. India has been ranked as less peaceful than Bangladesh and South Africa. Iceland and New Zealand are most peaceful. The ranking is based on more than 20 internal and external indicators of peace, including the number of deaths from conflicts, threat of terrorism, likelihood of violent demonstrations and the expenditure on the national military budget.
There is a high correlation between the high and low levels of corruption and peace. Low corruption is strongly correlated with greater peace. India is ranked 87th out of 178 countries, according to Transparency International's Corruption Index and this indicates a high level of corruption. There have also been many violent demonstrations in recent years and India's military budget has been increased manifold over the years - all indicating that there are serious threats present.
The ongoing Maoist insurgency remains uncontrolled and it is playing havoc with investors' and industrialists' confidence and expectations. It has spread over many states - Andhra Pradesh, Orissa, Chhattisgarh, Bihar, Jharkhand and parts of West Bengal and Maharashtra. It is also true that many criminal elements are operating under the Maoist banner. The spread of Maoism has affected the mining and metal sector adversely, and terrorism in general has led to damage to assets, disruption of production and hurdles on further industrial expansion. It is a very serious problem and has claimed many lives. It is spread over 40 per cent of India's geographical landmass.
There are other groups, especially in the Northeast, which have been claiming responsibility for derailing trains and planting bombs in crowded places. It is not just the failure of the government to collect intelligence but also its inability to maintain law and order. Much crime is being perpetrated in the name of one or the other of these terrorist groups, and this can escalate in the future.
Since many of the members of terrorist groups in poorer states are local village youths, rehabilitating them with proper jobs and training can prevent them from being active in these groups. Development in the areas affected by Maoist activities has to be rapid. Though these areas are developing, progress there is slow compared to that in cities.
It is sad that while 350 million Indians are doing well and belong to the middle classes, there still are thousands who have been left behind with little education, health care, assets, skills and a future. While a large section of the urban population is living comfortably, the slums are growing rapidly with few amenities. These glaring inequalities are breeding discontent, which is being tapped by criminal and anti-social elements and terrorist outfits. Ideology of terrorist groups is often not understood by those who join them but inequalities, hunger and exploitation drive many to take to violent means. Other countries also have inequalities, but in India this has grown rather suddenly and sharply. The level of inequality is also not adequately reflected by the Gini coefficient, which has risen from 34 to 37.8 reflecting moderate inequality. (When Gini coefficient is 0 it means no inequality and when it is 100 it means total inequality.) Also when ranking is done according to income, the lowest 20 per cent people have only a share of 8 per cent of the total income of the country and the top 20 per cent have 45 per cent income.
The rise in India's growth by around 8 per cent in recent years has also been uneven across states and sectors. Many states remain poor and this has led to mass migration to cities. If rural areas had been provided better health care and good education facilities, there would not have been such heavy migration. Also, if agriculture had been more productive, rural poverty would have decreased rapidly.
The urban infrastructure is clearly overstretched, and the police and the judiciary are overburdened. It seems an impossible task to monitor every corner and round up every suspect. The task is vast and daunting unless civil society cooperates.
Land disputes and inequalities in land distribution in rural areas are also glaring. The marginalisation of the Scheduled Castes, the Scheduled Tribes, the Other Backwards Classes and the minorities has gone on for decades in some states which has triggered off conflicts there. Over 85 per cent of the rural population is either landless or comprises sub-marginal or marginal farmers; they can become paupers with one big illness in the family or a harvest failure. How to prevent them from joining the Maoists and other such groups is going to be a major challenge.
If India becomes a hotbed of conflicts - many think this may happen in the future - attracting foreign investments will be a major problem. Even foreign institutional investors (FIIs), which are driven by short-term gains, have withdrawn money from Indian stock markets. Our domestic investors are also looking for investment opportunities abroad.
The result of an increase in terrorist acts will also mean that the cost of raising capital will go up. Indian companies, which have not been spending much on security, will have to spend more on keeping track of the movement of goods and personnel. Shopkeepers will have to be vigilant and individuals will have to arrange for their own security as is already the case in big cities. The government will have to spend a lot more on intelligence gathering and combing crowded areas for bombs on a regular basis to prevent such incidents as occurred in Mumbai on July 13.
(The writer is a Senior Fellow at Observer Research Foundation)
Courtesy: The Tribune
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
PREV
