Thursday, April 08, 2010

Companies bleed in Naxalite bloodbath
The faceoff with Naxalites is hurting India’s industry. Even as the battle to regain mineral-rich areas from the control of the Naxalites kicks off, businesses are bearing the brunt of the violence and losing big money. With the confrontation only likely to escalate, many entities fear their operations could suffer big time in the crossfire. 

  • Around 80 per cent of the country’s high-grade iron ore is in the red corridor. Orissa has 33 per cent of the reserves; Chhattisgarh, 19 per cent; Jharkhand, 27 per cent. Out of the total reserves of 23.59 billion tonnes of iron ore, 13 billion tonnes is haematite ore (high-grade ore) and 80 per cent of that is in the Naxalite-infested areas.
  • Business has been under attack in neighbouring Orissa. Naxalites have been blowing up railway tracks, disrupting loading of minerals, raiding mineral deposits or damaging telecom towers. The growing clout of Naxalites in the districts bordering Andhra Pradesh, Chhattisgarh and Jharkhand is hurting business activities.
  • In the past couple of years, the towers of mobile operators have turned out to be the soft targets of Naxalite violence. Industry sources estimate that at least 30 towers have been destroyed by Naxalites in the last two years. The Naxalites are targeting the towers to snap any communication among the police and the security forces, a senior police officer said on condition of anonymity.
  • Disruption of work, levy to insurgents, targeting of communications and security concerns stall development.
The disruptions due to Naxalites are impacting many important industries such as Mining, Steel, Tea Plantation, Telecom and if these industries face disruptions the growth of the economy as a whole gets affected negatively. The expenditure after destroying the facilities is for a single company but when it happens on a regular basis, it can affect the whole industry segment. Destroying telecom towers is one thing but it makes communication between people impossible.

1 comment:

Abhishek said...

Most of the companies affected are industrial companies . A large majority like the financials and tech companies are not affected at all