Victor Phizo’s Kohima shop sells steel furniture made in Assam. Although Nagaland is famous for its trees and timber, Victor does not sell wooden furniture because it is quite expensive. To begin with, timber has to be taken out of the state for production, and finished goods return to Nagaland with exorbitant price tags, including making charges, taxes and extortion money charged by Naga outfits. The prices are often ten times more than what consumers pay in the rest of India.
The steel products that Victor sells are transported on small trucks, which invite less extortion from the militants. “I pay Rs 2,000 at Dimapur and Rs 2,000 more before entering Kohima. The outfits collect ‘taxes’. I also pay monthly shop taxes to the two major outfits, of which one is part of peace talks, while the other stays underground,” said Victor. And, he has no option, but to pass on the extra cost to his customers.
Residents of the northeastern states are exempt from paying income tax. But, it is of no help to the people of Nagaland and Manipur, as militants, known locally as national political workers, extort huge amounts from them, ostensibly for their anti-India struggle. Such groups are also active in Arunachal Pradesh and parts of Assam, where ethnic Nagas are present.
The seeds of extortion were sown way back in 1946, when Naga leader Angami Z. Phizo launched an armed rebellion for an independent Naga state by forming the Naga National Council. In 1951, the NNC organised a plebiscite in the Naga-dominated areas of India and Burma and informed the Indian government and the United Nations that 99 per cent of the Nagas did not want to be with India or Myanmar. The UN, however, rejected the demand for independence. It led to the intensification of the separatist movement, and along with it started the collection of taxes.
The Nagas say their forefathers had paid the militants voluntarily to support the fight for a free Nagaland. “I can never imagine how a sacred movement could be turned into such a ghastly business,” said retired IAS officer K.K. Sema, who was transport secretary of Nagaland. “The ideas and philosophy of Phizo have fallen into the hands of greedy people. Half a dozen outfits are extorting money from their own people.” No wonder, inflation rate in Nagaland today is 25 to 30 per cent. In the rest of the country, it is less than 5 per cent. In Dimapur, an egg costs Rs 10, cooking oil costs between Rs 200 and Rs 300 per litre and a kilogramme of dressed chicken costs around Rs 350.
To beat such prices, many people resort to smuggling across the Myanmar border. They bring rice, vegetables and other essentials at much lower cost from Myanmar.
Sema said the extortions happened with the knowledge of the state police. “Trucks from the Dimapur plains to the hills of Kohima go through checking at different gates. At these gates, representatives of militant outfits sit with the police and collect money,” he said. The trucks have to pay from Rs 2,000 to Rs 20,000, depending on their capacity. Nearly 2,000 trucks ply every day between Dimapur and Kohima.
R.P. Kikon, additional director general (law and order) of Nagaland Police, called Sema’s allegations baseless. “Whenever someone gets demand letters [of extortion], we act swiftly. Hundreds of arrests were made last year,” he said.
Apart from traders and truckers, government employees, too, are victims of extortion. While the National Socialist Council of Nagaland (Isak-Muivah) is more active in the hills and valleys of Nagaland and Manipur, the government employees are targeted primarily by the NSCN(Khaplang), which is not part of the ongoing peace process. Government employees pay between Rs 2 lakh and Rs 6 lakh a year, depending on their rank and position. THE WEEK accessed an extortion letter received by a forest ranger. The letter, sent on the official letterhead of the ministry of finance of the government of the People’s Republic of Nagaland, demanded Rs 2 lakh.
The officer said he got the letter in April 2016, and he took a loan from the government and paid the amount. “The amount has now gone up to Rs 3 lakh. I also have to pay others like the NSCN(IM) and the NSCN(Unification). The total pay would be around Rs 4 lakh for me,” said the officer, whose annual salary is about Rs 8 lakh. When he falls short of money, he begs for reprieve and sometimes gets a small rebate. “How would I survive if half of my salary goes in paying them? We have nowhere to go,” he said.
Sema said many people who could not pay were gunned down by militants. “There was no investigation and the government blamed their deaths on insurgency. The situation is worse in the interiors close to Myanmar,” he said.
Much of the extortion is institutionalised. K. Savi, president of the Nagaland Voluntary Consumers’ Organisation, said there were nodal officers in every government department, who collected money from employees and paid the militants. “The government has turned a blind eye to it,” he said.
“If you count all the so-called taxes imposed on people, the total amount would be between Rs 5,000 crore and Rs 10,000 crore,” said Savi. He said even politicians have to pay for their survival. Former chief minister T.R. Zeilang had, in fact, mentioned payments to the NSCN(K) as an item in the CMO’s budget. “We informed the Central government about it and it has asked the National Investigation Agency to investigate,” said Savi.
The NIA has summoned Zeilang to Delhi for interrogation. But he has, so far, refused to go. Nagaland BJP president V. Longhu said Zeilang should cooperate with the NIA. “It is a matter between the NIA and the former chief minister. We have nothing more to say,” he said.
Savi was critical of the government targeting just the NSCN(K). “The NSCN(IM) extorts much more money than the NSCN(K), and it has not yet surrendered in places outside Nagaland. Why then action is not taken against the NSCN(IM)?” he asked.
In 2016-17, the NSCN(IM) had an annual budget of Rs 163.89 crore, according to documents accessed exclusively by THE WEEK. Despite a ceasefire agreement, its defence budget was Rs 118 crore. The outfit purchased arms and armaments worth Rs 15 crore in 2016-17, despite signing a peace accord with the Narendra Modi government in 2015. The entire consignment was routed through the India-Myanmar border.
Documents accessed by the THE WEEK suggest that the NSCN(IM) raised its entire budget amount of Rs 164 crore through extortion and illegal exports. It collected Rs 1.8 crore from shops in Dimapur and Rs 1.6 crore from taxis and hotels in the town. Even government organisations like the Food Corporation of India and the forest department of Nagaland were not spared.
A large number of non-Naga businesses also thrive in Dimapur. Most of them are owned by traders from Bihar, Uttar Pradesh, West Bengal, Rajasthan and Gujarat, with the Nagas controlling only 10 per cent of the total trade. To avoid paying income tax, they often register their businesses in the name of local Nagas. And, the money they save is, in turn, funnelled into the black money system of the Naga militants.
Akum Jamir, vice president of the Nagaland Business Association, said many non-Nagas registered their establishments under the names of Nagas. “Nagas are very trustworthy and honest. They do not cheat anybody. So they allow outsiders to open their businesses in their names,” said Akum, who runs a shop of guns and guitars in Dimapur.
The business association is now receiving applications for membership. “Around 1,000 non-Nagas have applied so far. We have found that only 300 of them are genuine. The rest run their business in the name of the Nagas,” said Akum. “We would reject such applications and would ask the government to take tough action.”
Though Akum has a gun dealership, the militants have not spared him, too. He was once asked by the NSCN(K) to collect money from other businessmen. The militants wrote that they wanted money as the group was relocating to a safer place because of the massive Army presence in Dimapur. The letter said after receiving the amount, each one of them would be included in their yearly ‘taxation’ regime.
Such outlandish demands have made the militants hugely unpopular. Two years ago, for the first time in Naga history, an organisation was set up by the civil society to fight extortion. Sema was the brain behind the group. He said he had given money to the militants in the past. He spoke of an instance when the NSCN(IM) went to the UN seeking support for the Naga cause. “But when I understood that they were taking money from us for holidaying in foreign countries and to send their kids abroad for studies, I chose not to support them anymore,” he said.
The formation of the organisation, which is called Against Corruption and Unabated Taxation (ACAUT), was not easy, said Sema. “The day we called a convention in Dimapur against paying taxes to seven groups, a message came from the NSCN(IM), asking us to stop. Our members decided to call it off. But I told them that they would die bleeding one day by paying tax. I also sought help from the government. But, they refused to help. The people were angry, and, finally, the Army was deployed, and that was how we held our first convention,” said Sema.
Tia Longchar, chairman of ACAUT, said he wanted all seven Naga groups to unite. “People have paid crores, but what have they got?” asked Longchar. “Either you deliver or perish. If the government of India would not listen to you, go back to the jungles and fight. We will give you money for that. But there cannot be easy flow of funds from the hard-earned money of people, if you are unsuccessful in dealing with India.”