The dust had barely settled on last year's stunning terrorist attacks on trains
across Mumbai, India's financial capital, when the news of a new series of
bombings aimed at Hyderabad came across the wires. The southern Indian city,
not to be confused with a city of the same name in Pakistan, boasts a rapidly
growing software industry and has often been described as India's most livable
As with the non-starter of an investigation into last year's bomb attacks on
hapless Mumbai commuters, the Indian government quickly blamed a "foreign hand"
for the bombings last week. Once again, a familiar pattern of blaming outsiders
for an outrage in the
heart of India will likely produce no credible results, and eventually lead to
the fizzling out of efforts to locate and penalize the offenders. And
certainly, there will be no efforts to address the key problems being faced by
the country's poor, which remains the main breeding ground of terrorist
While much of the media attention in India focuses on the threats posed by
Islamic terrorists, less attention is paid to the terrorists who have caused
greater damage to both life and property. These are the Maoist guerrillas who
kill landowners and police with alarming regularity in an agricultural belt
running from the middle of southern India to the borders of Nepal. The economic
underpinnings of the terrorist movement in India can be best appreciated by
examining the Maoists.
Backwardness begets ...
I wrote in a recent article  about how India has failed to improve the lot
of its poor fast enough. Even as the proportion of the population living below
the poverty line has steadily declined over the past 10 years, as defined by
the World Bank and the Asia Development Bank in recent reports, [2, 3] the
sheer number gives pause for thought. There are at least 200 million poor
people in India, a figure that must decline sharply before any meaningful
impact on the stresses and strains of modern living can be sorted.
By stresses and strains of course I am referring to the urbanization that must
be accelerated by India if these poor will have a meaningful chance of escaping
poverty in coming years. To do that requires an overhaul of the infrastructure
that is provided to urban areas, as well as the removal of antiquated
restrictions on land usage as well as floor space available for development.
All that, however, must wait on the first part of the story, which is the
removal of restrictions on industry. Jobs are created by the private sector,
not mandated in government budgets. The opening up of strenuous restrictions on
business would be the primary source of generating employment as well as
creating a viable group of second-tier cities that can absorb the rural masses
seeking better futures.
As things stand, the options for poor people are quite limited - moving to one
of the country's top 10 cities would inevitably create undue pressures on
pricing. This week the media reported, for example, that a Mumbai office block
garnered the highest rent in the region extending from the Middle East to
Southeast Asia, an area that includes well-developed cities such as Singapore
and Dubai. However, such pricing is indicative of severe supply lags relative
to demand, as against being something to be proud of. Indeed, it is clear that
many Indian cities are unable to attract new businesses because of spiraling
costs, which obviously also limits potential employment growth.
Every one of these issues plays straight into the hands of Maoist recruiters,
who find it easy to hire foot soldiers from among the desperately poor with
limited upward mobility. Quite unlike India's urban poor, who have more
extensive opportunities (as borne out by many a rags-to-riches story), the poor
in rural India have only the one option, namely to leave their villages and
take the risk of working in a big city.
In its report cited above, the World Bank made the following observation on
Indian agriculture that more or less conveys the desperate situation in rural
Slow agricultural growth is a concern for policymakers, as some
two-thirds of India's people depend on rural employment for a living. Current
agricultural practices are neither economically nor environmentally
sustainable, and India's yields for many agricultural commodities are low.
Poorly maintained irrigation systems and almost universal lack of good
extension services are among the factors responsible. Farmers' access to
markets is hampered by poor roads, rudimentary market infrastructure, and
At this point, it is perhaps pertinent to examine the charges that India
frequently makes of Pakistani involvement in terror acts. While it has been
generally proved that Pakistan's Inter-Services Intelligence has provided
significant training and arms assistance to Muslim terrorists across South
Asia, the charges do not explain India's own failing in improving the lot of
its Muslim population that could help deny new recruits to terrorist causes.
Being the most visible minority in India, it is perhaps true that Muslims get a
lot of political attention. Even so, claims that the community is backward or
that there is any evidence of systemic discrimination are, in the main, bogus.
Many of the top 100 of India's richest men are Muslim, as are prominent
politicians, sportsmen and film stars. This record would simply be impossible
in any country with structural constraints.
Despite all that, it is also true that the country's criminal underworld is
almost entirely Muslim, and that Muslim children are much more likely to turn
to a life of crime than children of other communities in India. It is also
true, as per the Indian government  and other multilateral agencies, that
Muslims lag in key human-development indicators such as education.
All too often, comparisons are made to the United States' black community,
wherein another visible minority does have its successes in the entertainment
business but failures in most other indicators, including the number of
criminals within the population. However, those comparisons are simply
wrong-headed, because India's Muslims show broad-brush success across many
The more likely facet to understanding Muslim backwardness in India is to
examine the distribution of the population, which for historical reasons is
more urban than the general Indian population. While some two-thirds of Indians
live in the villages, the proportion is thought to be inverted for Indian
Muslims, with most living in urban and suburban areas.
That observation also brings into context the poor infrastructure, rising costs
and declining growth in many Indian cities as they suffer from the weight of
rising populations. In Mumbai, the conflict between the old and the new has
often led to significant corruption on development projects, which in turn has
led politicians to consort with unsavory characters in the underworld. In
keeping with the South Asian penchant for keeping things in the family,
including businesses and political parties, most Indian underworld outfits
operate as family groups. It is therefore the accident of birth rather than
one's religion that appears to affect the choice of career in urban India.
Poor infrastructure in cities also means low-quality education in many areas,
in turn driving poor Muslims to religious schools. Graduates of such schools,
whose curriculum lags the national curriculum by many decades, find it well
nigh impossible to compete with other graduates for jobs in fast-growing
sectors such as software development. The same observation on employment
opportunities is true for many graduates from rural Indian schools.
While it may indeed be true that much of the Indian underworld is Muslim, it is
a lot less likely that these criminals aren't working for political bigwigs.
Thus the nexus of politicians, big business and criminals provides a seamless
delivery of hit-men and small-time crooks that help to grease the wheels of
India's parallel economy.
As with all bad economic ideas, the ultimate cost is borne by growth, and this
is true of the parallel economy in India that has pushed inflation
significantly upward in urban areas. That has in turn pressured the living
standards of poor people while poor infrastructure limits employment growth.
Finding themselves in this lose-lose situation, it is highly likely that many
young Indian Muslims simply adopt a life of crime that eventually sets them on
the path to more heinous acts.
The only way to break this vicious cycle is to take the task of economic
development in urban areas much more seriously. Higher economic growth with
attendant employment generation will do more to erase the scourge of terrorism
in India than any alternative strategy, and will do so in less time and with
greater chance of success as well.
1. South Asia's
schizophrenic twins, Asia Times Online, August 18, 2007.
2. Key Indicators 2007: Inequality in Asia, Asia Development Bank.
3. India Country Overview 2006, World Bank.
4. Census of India 2001, government of India.