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India Edges Maoist Rebels From Mining Zone, Chidambaram Says

February 02, 2012

(Updates with Supreme Court order on Chidambaram investigation in sixth paragraph.)

Feb. 2 (Bloomberg) -- India is winning command over mineral-rich areas where Maoist guerrilla attacks deter billions of dollars in potential investment, Home Minister Palaniappan Chidambaram said, one year after he declared the conflict deadlocked.

“Albeit slowly, we are gaining control of the situation,” reversing Maoist advances that began after 2004, Chidambaram said in a 40-minute interview on counter-terrorism, Pakistan and prospects for expanding foreign investment in India’s economy. “The earlier estimate that in three to four years we will be able to gain ascendancy was an optimistic estimate,” he said. “That I am willing to concede.”

Chidambaram told a conference in 2009 that reinforced police battalions in heavily forested Maoist enclaves would eliminate a rebel-run zone whose area is as big as Portugal. On Feb. 1 last year, he described “a kind of stalemate” in the insurgency, which blocks mining of bauxite, iron and other minerals. Execution Noble Ltd., a London-based financial services company, said in 2010 that the region had the potential to draw $80 billion of investment.

The minister declined to specify what period now may be needed to defeat the rebels beyond saying “it will take a few more years.” He spoke in his high-ceilinged office in the red sandstone secretariat built a century ago as the seat of Britain’s colonial government.

Harvard Graduate

Chidambaram, 66, a lawyer and Harvard Business School graduate from India’s southern state of Tamil Nadu, is one of the most prominent members of the Congress party-led government. As finance minister from 2004 until 2008, he oversaw record economic growth that averaged 8.5 percent a year.

India’s Supreme Court today ordered a lower court to decide whether to investigate Chidambaram’s role in the under-pricing of mobile phone company licenses, one of several corruption scandals that last year stalled policy-making by Prime Minister Manmohan Singh’s government and lowered investors’ confidence in the $1.7 trillion economy.

Singh moved Chidambaram to the Home Ministry amid public anger over the 2008 attack on Mumbai by 10 Pakistani guerrillas that killed 166 people.

Pakistani Trial

Pakistan and India have fought three wars since they separated at their independence from British rule in 1947, and Pakistan backs Islamic militant groups that oppose India’s claim to the disputed territory of Kashmir. While India demands that Pakistan prosecute seven men it is holding as accused masterminds of the Mumbai assault, Chidambaram voiced little hope that a visit set for this week by Pakistani investigators might advance the process.

“They’ve changed the judge four times, they’ve not examined a single witness,” Chidambaram said of Pakistani authorities. “I don’t think there is a political will to start the trial there.”

Chidambaram said a hostile parliamentary opposition, and Singh’s retreat in December on a plan to allow investment by foreign retail chains such as Wal-Mart Stores Inc., have helped create “impressions that the government is frozen in its tracks, but that is not true.” He cited the country’s average annual growth of almost 8 percent from 2008 to 2011, despite the global recession.

State Elections

While the Congress party should win three of five state elections to be held by early March, it remains unclear whether that will weaken the political foes of retail investment by overseas companies selling multiple brands, Chidambaram said. “The only way in a democracy is to continue to engage in discussions with them and bring them along.”

Chidambaram didn’t discuss the court hearings triggered by Subramanian Swamy, a political rival who says he should be prosecuted for failing as finance minister to prevent the telecommunications ministry from under-pricing cellphone licenses in 2008. Chidambaram said last year he urged an auction of the permits instead of their issuance for fees fixed more than six years earlier.

The Maoist insurgents, whom Singh calls India’s greatest internal threat, launched offensives after 2004 for which “the government was, if I may say, unprepared both in terms of policy and capacity,” Chidambaram said.

Since 2008, “we have now virtually doubled the number of security forces deployed in Maoist areas,” he said. “It has taken us three years to equip and train these.”

‘Rule Through Fear’

While the Maoists are “on the defensive” in parts of Jharkhand, Chhattisgarh and West Bengal states, they have “consolidated themselves” in Maharashtra and Orissa, he said.

“They rule through fear and intimidation,” Chidambaram said. “In 2011, out of the 464 civilians killed, 216 were killed after being named as police informers.” Many of them died in public executions held in Maoist-run villages, he said.

The Maoists say they are fighting for the rights of poor villagers and tribal communities whose resources are, the rebels argue, being exploited to propel India’s economy with few benefits for local people. The rebels have killed more than 8,900 civilians and security personnel since 1998.

Indian police for years have abused civilians in the fight against the Maoists, according to New York-based Human Rights Watch. While India’s Supreme Court in October ordered an independent probe into allegations that police in Chhattisgarh tortured and sexually assaulted a schoolteacher whom they accused of links to the rebels, “authorities have not initiated any inquiry or criminal action against the police officers implicated,” Human Rights Watch said in a Jan. 31 statement.

Leaders Killed

The reinforced police have failed to recapture significant territory, said Ajai Sahni, executive director of the New Delhi- based Institute for Conflict Management.

Instead, they made gains because “Chidambaram last year shifted his focus to narrow, intelligence-led operations, overwhelmingly targeting the Maoists’ leadership,” Sahni said by phone. Of 39 Maoists elected to the movement’s central committee in 2007, 18 have been killed or arrested, he said.

A lasting containment of the guerrillas will require better police leadership and training, Sahni said. Chidambaram said he will focus his next two years on building up state units, which rather than federal police are mainly responsible for law enforcement.

Maoist guerrillas are active in a dozen of India’s 28 states, many of which are rich in iron ore, coal, bauxite and manganese. The epicenter of Maoist violence lies in the forests of the eastern state of Chhattisgarh. NMDC Ltd., India’s largest iron-ore producer, operates its biggest mine in the region, and Essar Steel Ltd., the country’s fourth-ranked producer of the alloy, plans to build a $1.5 billion steel plant there.

--Editors: Mark Williams, Anne Swardson

To contact the reporters on this story: Bibhudatta Pradhan in New Delhi at; James Rupert in New Delhi at

To contact the editor responsible for this story: Peter Hirschberg in Hong Kong at

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