Google Analytics

Friday, 30 May 2014

The impact of Naxal Movement on businesses in India

The anti-capitalist policies of the 47-year-old Naxalites discouraging businesses to establish industries and investors are reluctant to start any business venture. Corporate are facing extortions and security problems and they are even paying taxes levied on them by the Naxalites in these areas. According to Global Research, a centre for research on globalisation (December 20, 2013), “Since then, the insurgency has spread like wildfire over 40 percent of India’s land area, encompassing 20 of the country’s 28 states, including 223 districts (up from 55 in 2003) out of a total of 640. The seven most affected Indian states in terms of fatalities are Chhattisgarh, Jharkhand, West Bengal, Maharashtra, Orissa, Bihar and Andhra Pradesh, in that order. These regions comprise the ‘Red Corridor’.

 About 10,000 people have been killed in the expanding civil war since 1980. The Maoists wield about 20,000 armed fighters and another 50,000 supporters. The Indian government complains that the insurgency has crippled economic activity in central and eastern India. The Naxalite guerrillas are running a shadow government and courts in the areas work under their control. The former Indian prime minister, Manmohan Singh, termed the Naxalite insurgency “the single biggest internal security challenge ever faced by India”.

The implications of Naxal movements are disastrous for the Indian economy, a reduced per capita GDP growth of all Naxal affected states excluding Andhra Pradesh and Maharashtra is below 1000 $. In comparison to this most of the unaffected states have a per capita GDP in excess of 1000 $ for the 2009 fiscal year. The economic condition of a state plays a pivotal role in its development. The Naxalite movement has severely impacted the economy of the affected states as well as India as a whole. Not only economically, the movement is also pushing backward the country socially as well as.

1 comment: