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RUEHCI/AMCONSUL CALCUTTA 1578

UNCLAS SECTION 01 OF 03 CALCUTTA 000535 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
PACOM FOR POLAD 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM IN PTER
SUBJECT: RESOURCE WEALTHY JHARKHAND FACES INSTABILITY AND RISING 
MAOIST INFLUENCE AS GOVERNMENT REMAINS WEAK 
 
1:  (SBU) Summary: On November 13-14 Poloff visited the capital 
of India's youngest state Ranchi, Jharkhand.  After a rapid 
succession of 5 governments in the last 6 years, newly-installed 
Chief Minister Madhu Koda leads a fragile coalition government 
that will likely last no more than six months.  Jharkhand is 
rich in resources but plagued by lack of development and 
poverty, particularly among its tribal population.  Displacement 
of tribals from traditional landholdings for industrialization 
and development has spawned controversy and a tribal resistance 
movement that has rendered many areas susceptible to Maoist 
influence.  Eighteen of Jharkhand's 22 districts are already 
affected by various levels of Maoist activity.  With an unstable 
government unable to make decisions, Jharkhand is falling behind 
as India pushes for double-digit growth rates.  End Summary. 
 
 
Introduction 
-------------- 
 
¶2.  (U)  Following nearly a century of agitation by tribal 
groups demanding a separate state, Jharkhand was carved out of 
mineral-rich southern Bihar on November 15, 2000.   The state 
has a population of 26.9 million and extends over 79,714 square 
kilometers.  With West Bengal in the East, Orissa to the South, 
Chhattisgarh and Uttar Pradesh to the West and Bihar to the 
North, this fledgling state has a 27 per cent tribal population 
(consisting of 32 tribes) who mostly live in abject poverty 
without basic amenities.  54 percent of Jharkhand's population 
lives below the poverty line in spite of the state's huge 
mineral (coal, iron, copper, bauxite) and forest resources that 
account for 38 percent of India's total natural resources.  Key 
industries in Jharkhand include steel, coal, aluminum, uranium, 
iron ore and bauxite, with two major manufacturing centers at 
Jamshedpur and Bokaro.  At the time of its formation, Jharkhand 
had the rare distinction of being an Indian state with a budget 
surplus.  However, administrative mismanagement and corruption 
have lead to a budget deficit. 
 
 
Political games 
----------------- 
 
¶3.  (U) With 5 governments in the last 6 years, political 
instability has plagued Jharkhand since its inception, and 
electoral politics has turned into a mere "numbers game." 
Jharkhand has 14 members in the Lok Sabha, and 81 elected 
representatives in its state legislature.  In 2000, the 
Bharatiya Janta Party (BJP) formed Jharkhand's first government 
with tribal leader Babulal Marandi as Chief Minister, but he was 
replaced mid-term by fellow party member Arjun Munda.  More 
recently in March 2005, Jharkhand Mukti Morcha (JMM) leader 
Shibu Soren took over as CM.  He lasted 10 days.  Once again, 
Munda took over but his government was toppled in September 2006 
by the defection of three Independent legislators (reftel). 
Madhu Koda, the Independent who replaced Munda as CM currently 
governs the state with a fragile coalition that has only 2 more 
legislators than the opposition.  His government enjoys the 
"outside support" of the Congress party, the JMM, and the 
regional party Rashtriya Janta Dal (RJD). 
 
¶4.  (SBU) During Poloff's November 13-14 visit to the state 
capital, Ranchi, the current coalition was seen as "shaky." 
Former Director General of Police R.R. Prasad said that Koda's 
focus is to "keep an eye on the 42nd legislator" to ensure he 
does not desert the governing coalition and topple the 
government.  Current Director General of Police J. Mahapatra 
noted that the Koda has to consult the RJD or the JMM leadership 
before making even minor decisions.  BJP Spokesperson R. Pushkar 
proclaimed that his party is preparing for new elections in the 
next six months. 
 
¶5.  (SBU) Tellingly, RJD State President G. Rana observed that 
Babulal Marandi, who broke away from the BJP and now heads his 
own unregistered party, the Jharkhand Vikas Morcha (JVM), is 
actually the most popular political leader in the state as 
proved by his 194,000-vote victory in the recent Lok Sabha 
by-election in the Koderma district.  Marandi won votes not only 
from his usual supporters, the tribals, but from a cross-section 
of non-tribal communities like the Yadavs and Muslims.  He 
 
CALCUTTA 00000535  002 OF 003 
 
 
campaigned on an anti-BJP platform, accusing his former party of 
corruption and lack of a vision for development in the state. 
(Comment:  Marandi's overwhelming win could cause further 
political destabilization as members from the BJP may desert 
their party and join him.  Marandi, himself, predicts that 
Jharkhand will eventually see the dominance of one national and 
one regional party, implying that the Congress and the JVM will 
be the survivors of the current multi-party battle.  One 
political observer told Poloff that the RJD and JVM will likely 
form an alliance.  Therefore the BJP's position in the state is 
likely to deteriorate.  End Comment.) 
 
 
Left extremism 
---------------- 
 
¶6.  (SBU) Jharkhand is part of the "red corridor" of Maoist 
activity stretching from Bihar to Andhra Pradesh.  Eighteen of 
Jharkhand's 22 districts, primarily the tribal-inhabited forest 
areas, are affected by Maoist activity.  In some areas the 
Maoists run parallel governments in what have become "no-go 
zones" for state security and government officials.  Home 
Secretary J.B. Tubid estimated the total number of Maoist 
 
SIPDIS 
workers at about 2,000, with the number of hardcore elements 
ranging between 300-500.  Others put the number higher at 
approximately 3000 members. 
 
¶7.  (SBU) The primary factor underlying the Maoists' presence in 
the state is neglect by state administration and a deep-rooted 
feeling among tribal groups of alienation from the government. 
Police DG Prasad pointed out that prior to Jharkhand's 
formation, the government of Bihar deprived southern Bihar (now 
Jharkhand) of development funds for decades.  Basic amenities 
like drinking water and electricity were scarce.  The state 
suffers from that legacy even now and people in the tribal 
districts have a natural dislike and apathy for the government. 
Prasad also said that there is no central leadership or 
organization of the Maoists in the state.  According to him (and 
corroborated by Home Secretary Tubid), Maoist leaders are based 
in neighboring West Bengal and Orissa, and meet from time to 
time.   A level of competitive militancy exists among some of 
Jharkhand's Maoists who belong to different social groups such 
as the Yadav and Ganju clans.  Officials have not seen much 
evidence that the local Maoists work in coordination with 
Maoists in Nepal. 
 
¶8.  (SBU) In Jharkhand the Maoists' main targets are security 
personnel who are either not allowed into Maoist territory, or 
are "entrapped" into entering and then killed before they can 
leave the area.  However, some politicians also maintain links 
with Maoists who are able to "influence" electoral decisions. 
Maoists raise funds by extortion and levies on contractors 
operating in their areas.  Another source of income is trade in 
locally grown ganja or opium.  In some pockets, local officials 
survive by paying the Maoists protection money and negotiating 
with them unofficially for peaceful coexistence. 
 
 
Tribal displacement 
---------------------- 
 
¶9.  (SBU) During Munda's tenure as Chief Minister, 53 Memoranda 
of Understanding were signed with private companies including 
steel barons like Mittal, Jindal and Tata.  This has given rise 
to tribal grievances on the issue of displacement from their 
traditional landholdings.  Impoverished as they are, the tribals 
feel that their only source of identity and livelihood - land - 
is threatened by the government's new policies.  Tribal 
organizations like the Jharkhand Janadhikar Manch are struggling 
to safeguard existing rights under the Chhotanagpur Tenancy Act 
and the Santhal Parganas Tenancy Act which provide safeguards 
against land transfers.  According to tribal leaders, the 
state's tenancy laws stipulate that tribal land is inalienable, 
yet already thousands of them have been dispossessed.  Tribal 
leader Ratan Tirkey told Poloff that the government intends to 
overturn the provisions in these acts to enable greater 
industrialization and urbanization.  In fact, the Panchayati Raj 
(local self-governance) Act which advocates community 
participation in governance and development has been ignored - 
 
CALCUTTA 00000535  003 OF 003 
 
 
Jharkhand has had not Panchayat elections since its formation. 
 
¶10.  (SBU) Another point of contention is over the Land 
Acquisition Act (LAA), a colonial era law that gives sweeping 
powers to the state in matters of land purchases.  The 
government officials and industrialists we spoke with believe 
that the LAA permits the government to "acquire" land, even 
tribal property irrespective of the two tenancy acts, and 
irrespective of the Indian Constitution which contains specific 
provisions protecting tribal rights.  Home Secretary Tubid, a 
tribal himself, said that only tribal land is being allotted for 
industries.  (Comment: The continuing dominance of some colonial 
era laws cripples the implementation of legislation that 
protects tribal property.  Contradictions between different laws 
and policies, and their varied interpretation by courts and 
politicians, have complicated the situation.  Moreover, there is 
no suitable resettlement and rehabilitation policy in place.  A 
conservative estimate puts the total number of displaced people 
in Jharkhand between 1951 and 1995 is about 1.5 million. 
However, one tribal leader observed that at least 10 million in 
the region have been displaced since India's independence.  End 
Comment.) 
 
¶11.  (SBU) Comment:  At the time of the state's formation, a 
spirit of optimism prevailed amongst Jharkhand's population. 
Today, Jharkhand's government teeters on the brink of collapse, 
as political parties jostle for power and political alliances 
come and go.  In our estimate, the current government is 
unlikely to last more than 6 months.  Jharkhand will fall 
further behind the rest of India until strong leadership can 
bring all parties, including tribal groups, to the table or at 
least backing a common agenda for the state.  With political 
upheavals and corruption becoming the order of the day, most 
contacts did not appear hopeful for significant progress the 
near future.  However, Jharkhand's natural resources sustain 
business' interest in the state with hopes of tapping the great 
wealth beneath the state's surface. 
JARDINE