Despite the
increased global scrutiny on the flow of funds for Islamist militants across
the world, sufficient finances continue to flow to maintain the infrastructure
for the
jihad in J&K. This includes funding for recruitment, arming
the militants, funds for training and camps, paying for their survival on the
ground, maintenance of their families (both in J&K and Pakistan), and all
associated operational needs.
Security
sources informed
South Asia Intelligence Review that an estimated INR
250 to 300 million was being disbursed to terrorist and secessionist groups in
J&K each month, from Pakistan. However, this does constitutes a 30 to 50
per cent decrease in what was being paid out earlier. This diminution has been
gradual and is primarily linked to the ongoing peace process between India and
Pakistan and the decimation of the militant leadership and cadres within
J&K, as well as factors such as the US monitoring of militancy funding from
Pakistan.
Disbursement made
to militants in J&K (in Indian Rupees)
Type
of Disbursement
|
Foreign
Militants
|
Local
Militants
|
Money
disbursed at the time of recruitment
|
Up to 50,000
|
10,000
to 25,000
|
Monthly
Remuneration
|
10,000-15,000
|
3,000 to
10,000
|
End of
tenure payment
|
200,000-250,000
|
-
|
Reward
for a spectacular terrorist act
|
100,000-200,000
|
100,000-200,000
|
Remuneration
given to a militant group’s chief
|
Up to
50,000 per month
|
Up to
50,000 per month
|
Relief
for family of deceased militant
|
NA
|
Ex
gratia 20,000 plus a monthly amount of 1,500-3,000
|
Each
fidayeen
(suicide cadre) selected for suicide attacks is assured by his handlers and
the militant leadership that his entire family will be taken care of for years.
Sources, however, disclose that relief money is paid to any deceased militant’s
family for at least six months and there are accusations that some leaders of
the secessionist group, the All Parties Hurriyat Conference (
APHC),
swindle this money.
Except for
a small percentage of funds raised through collections and donations made in
the Kashmir Valley, virtually the entire funding for militancy comes from other
countries, including Pakistan, and various international Islamic organisations.
However, the major contributor remains Pakistan through its external
intelligence agency, the Inter-Services Intelligence (
ISI).
The
various methods employed for raising finances for terrorism in J&K
include"
-
Fake
Currency printed in Pakistan
-
Collection
of donations in some Middle Eastern and European countries under the name
of ‘
Jihad Funds’.
-
Extortion
from traders, contractors and affluent people in J&K.
-
Money
sent from Pakistan to militant and secessionist groups operating in
J&K mainly through
Hawala (parallel remittance system) and drug
dealers.
-
Some
Kashmiri businessmen dealing in the trade of carpets, handicrafts, etc in
Dubai.
-
Hawala
dealers in Mumbai and Delhi.
-
Zakat
(an Islamic tax) and donations.
Militant
groups operating in J&K have, however, lately been affected by a shortage
of weaponry and funds following Islamabad’s decision to momentarily de-escalate
the Kashmir
jihad due to the pressure arising from the increasing
militancy and internal conflicts within Pakistan, pressure from the United
States, a constant scrutiny of the large militancy-linked monetary transactions
from Pakistan and the successful operation of the Indian counter-insurgency
grid. Terrorists operating in J&K have consequently been forced to make
distress calls to their mentors in Pakistan. Security agencies have intercepted
numerous conversations between militant cadres based in the State and their
leaders and handlers in Pakistan and Pakistan occupied Kashmir (PoK) over the
past months, which also indicated that the groups were under enormous pressure
due to the neutralization of top level terrorists by Security Forces (SFs) in
the State. "Colleagues require stores and
faloose (funds)",
was one of the distress messages sent by the Lashkar-e-Toiba (
LeT)
cadres in the State to the outfit’s leaders in Pakistan some time in January
2008.
One of the
major sources of funding for militancy in J&K is the fake Indian currency
notes (FICN) being pumped into the State by the ISI and sections of the
Pakistan Army. While the amount of FICN currently in circulation is not
available, sources indicate that of these are being printed in the security
press at Malir Cantonment in Karachi and three other printing presses in
Pakistan. According to disclosures by some militants and their over ground
workers arrested along with currency (reported in April 2008), besides Karachi,
the fake currency is also being printed in Lahore, Quetta and Peshawar. The
currency notes printed at the Malir Cantonment security printing press are high
quality notes and closely resemble genuine Indian currency. According to
sources, "Pakistan authorities have adopted a unique modus operandi to
smuggle the currency to J&K. The notes are first planted in the ‘banks’ at
Dubai, Kathmandu, Bangkok, Dhaka and Singapore from where they are physically
smuggled by the smugglers working for Dawood (D) Company through Qatar Airways,
Royal Nepal Airlines and Pakistan International Airlines. Unaccounted baggage
and containers in planes and ships are also being used for smuggling."
Besides airports, coastal areas and border areas are also used for smuggling of
FICN, sources added.
Since
militants and their guides are being arrested interdicted by the SFs in
"view of fencing and sophisticated gadgetry installed on the Line of
Control (LoC) and International Border, Pakistan Army and ISI have started
taking the services of D Company [the mafia group of Dawood Ibrahim] to push
fake currency into J&K." Dawood Ibrahim’s criminal network, which is
currently headquartered somewhere in Pakistan, has close links with the LeT.
Besides militants in J&K, a part of the FICN sourced from Pakistan is also
"distributed among criminals and smugglers in different parts of the
country mostly New Delhi, Mumbai, Hyderabad, Lucknow etc., as the ISI also used
services of these criminals occasionally to transport weaponry and explosive
devices."
According
to sources, till 2006, FICN worth INR 50 to 80 million was pumped into the
country from Pakistan per annum. From 2007, however, the amount has increased
to INR 120 to 130 million. A special cell is reported to have been set up by
the ISI in Islamabad to regularly monitor the changes in Indian currency notes.
This cell is assigned the task of studying the notes and changing the features
accordingly, so that the fake currency is not detected. Further, sources
indicated, the "militants revealed that Pakistan Army and ISI know that
they can’t disturb the Indian economy by pumping INR 130 million worth of notes
a year. Their objective was only to finance militants and keep the ‘Kashmir
budget’ out of the purview of the Pakistan Army."
Forensic
examination of seized FICN indicates uniformity of replication of security features
from which it can be inferred that the notes originate from the same source and
there is a strong likelihood that this lies in Pakistan, according to a
presentation made by a security agency in October 2007 at New Delhi. Apart from
shipping in the FICN, the fake currency notes were also reportedly being
smuggled from land routes through Nepal, Bangladesh and J&K, train routes
through Atari and Munabao-Khakrapar and also by air.
According
to the annual report (2005-06) of the Directorate of Revenue Intelligence
(DRI),
…the
smuggling of fake Indian Currency notes has acquired a greater geographical
spread. While, in the past, such smuggling was largely confined to the
Indo-Pakistan and Indo-Nepal borders, the India-Bangladesh border is now
becoming increasingly vulnerable. Intelligence inputs indicate that
counterfeit Indian Currency printed in Pakistan is moved to Bangladesh either
directly or through Dubai and then brought across the porous Indo-Bangladesh
border. Intelligence also indicates the smuggling of FICN to destinations in
South India such as Bangalore, Hyderabad and Kerala.
|
Transactions
in counterfeit currency are fairly profitable. The DRI notes, "The rate
(per Rs. 100) on the India-Pakistan border is around Rs. 35, which goes up to around
Rs. 40 in Delhi and Rs. 45-50 in the district and
mofussil areas, where
chances of detection are perhaps lower. These rates are however flexible and
depend upon quality, availability and negotiating strengths at particular
points of time."
Intelligence
reports indicate that the Samjhauta Express, a train service which facilitates
people-to-people contact between India and Pakistan, is being used by the ISI
to circulate FICN and arms in India. According to intelligence sources in
Punjab, the Samjhauta Express, which currently runs between Attari in India and
Wagah in Pakistan, has "always been used by the ISI for smuggling weapons,
currency, narcotics and spies into India." In recent times, a May 23,
2008, report indicated, there has been a big network of ISI-sponsored 'sawari'
(courier) operators who lure poor people to smuggle their 'stuff' into India.
These people are 'soft targets' for the ISI "which uses them for carrying
out disruptive activities and providing logistic support to their existing terrorist
modules in India, besides weakening the Indian economy by pushing in fake
currency." "This train is the easiest way to enter India with legal
documents and disappear here," said an intelligence source, adding that
smuggling of FICN and Pakistani SIM cards by 'swaris' cannot be de-linked from
terrorist activities in India. Following the terrorist attack on Parliament in
December 2001, services of the Samjhauta Express were terminated in January
2002. However, the services were resumed again in January 2004.
Karvan-e-Aman,
the Srinagar-Muzaffarabad bus service, another channel which enhances the
emotional enlistment between India and Pakistan, is also a conduit for the
transfer of funds for militants in J&K. While the utility of this channel
for funds transfer is relatively low, since Police scrutiny is fairly intense,
there have been some attempts. For instance, troops of 19 Infantry Division
seized INR 150,000 on May 13, 2008, from Mufad Ali, a passenger who came from
PoK on the Srinagar-Muzaffarabad bus. The money was reportedly seized when Ali,
a resident of Pahl village in PoK, was handing it over to a contact person
identified as Hafizullah, who had been deputed to collect the funds by a
militant operating in Sopore.
Police
sources told
SAIR that narcotics money originating in Pakistan is also
being pumped into J&K. Apart from pushing in drug money, narcotics are also
sent directly into J&K from Pakistan through infiltrators who subsequently
sell them in the local markets. More than 100 kilograms of narcotics, including
heroin and brown sugar, was seized in the State during 2007.
The
intricate
hawala network, according to officials, profits every
conceivable terrorist and secessionist group in J&K. Indeed, senior police
officials claim that militancy in J&K has emerged as a highly lucrative
'industry' for several thousand families. Apart from the major groups, cadres
of a number of lesser known organisations that have mushroomed in the extremist
milieu that is J&K today, have also cornered shares in the substantial
illicit financial flows. Many J&K-based doctors, engineers, technicians and
certain business houses working in the Gulf and engaged in the provision of
various services, or export of goods, such as carpets and handicrafts, have
diverted funds through
hawala operators to finance militants and
secessionist leaders. Among one of the popular modes of
hawala transfer
is the movement of money through small-scale businessmen, such as shawl
vendors. Although individual amounts involved in these transactions are small,
very large numbers of such transactions result in transfers of great magnitude.
With their
handlers in Islamabad having de-escalated violence in J&K, militants
currently lying low and awaiting instructions to intensify violence on the eve
of the Legislative Assembly elections later in 2008, are beginning to complain
about lack of finances to maintain their infrastructure within the State. In
fact, there have been isolated incidents during 2007 and 2008 when some
militants have resorted to looting and extortion of local contractors and
businessmen in the Poonch, Ramban, Kishtwar and Doda Districts.
According
to an Intelligence Bureau report, the ISI is planning to substantially enhance
the financial support to militant groups operating in J&K, to augment
subversion in the run-up to the Legislative Assembly elections. The ISI is
reported to have recently briefed the Pakistani political establishment on the
militants' activities. The report said the "freedom movement" in J&K
was weakening as the
jihadi groups were facing financial constraints and
the security forces had cornered the militants, The report stated further that
the ISI proposed to double financial support to militants so that they would be
able to disrupt the elections, adding that the ISI had assured the extremist
leadership that it would make every effort to see that no pro-Pakistan
individual or group participated in the elections.
With the
financial system for sustaining militancy in Jammu and Kashmir intact, it is
easy for Pakistan and the
jihadi groups to maintain a threshold level of
violence in the conflict wracked State or to calibrate it to transient
perceptions of Pakistan’s interests and strategy over time.