Bihar: Biting the Bullet

Tension is writ large on the face of Vijay Kumar every morning as he opens his electronics appliances showroom in the Kankarbaug area of Patna. About half a dozen security guards, two of them armed, take positions on either side of Kumar as he enters the shop. It's another day of brisk business in Patna, but Kumar is anything but elated. "Business is good but my personal life is hell," says the 40-year-old trader, from whom extortionists have demanded Rs 10 lakh. Kumar is one of the several well-to-do businessmen threatened by extortionists and kidnappers in Bihar, which has seen an alarming spurt in these crimes in the past few months.

It took the kidnapping of young hosiery merchant Pankaj Singhania in Patna last month to make the business community realise the enormity of the situation. Even as the Singhanias were grappling with the abduction, unconfirmed reports said Pankaj had been killed by his kidnappers. Another tragedy struck. On April 20, Singhania's 25-year-old wife Sangeeta committed suicide by consuming poison, presuming that her husband had been killed. A wave of protests, including a bandh, followed. But the police now say that Singhania could still be alive though some arrested criminals had claimed that he was killed soon after the abduction. Conceding that he could be alive, the state DGP K.A. Jacob, says, "It's possible that a smaller gang which kidnapped him may have passed him on to a more organised gang because of police pressure."

The incident has come as a shock to the business community and some traders are openly talking of moving out of the state. The reasons are obvious. Incidents of kidnapping in the state have gone up from 291 in 1991 to 342 in 1997. In the first three months of this year 51 kidnappings have been reported, while several others went unreported because the victims simply paid up. Jacob admits that areas like Patna, Bhojpur, Sasaram, Champaran and Begusarai are breeding grounds for gangs, mostly indulging in kidnappings. The police also say that some of these kidnappings could have been planned from inside the jail, and some visitors to the Patna Jail are being questioned. Businessmen with little faith in the police, like Kumar, keep armed private security guards for protection. The sense of insecurity persists because the Government is unresponsive. It is too busy trying to cope with the fallout of the income-tax raids in connection with the fodder and bitumen scams (see box).

The atmosphere of fear and insecurity does not augur well for industry and business in the state. The traders facing kidnapping and extortion threats have either shifted their businesses to safer environs or are in the process of doing so. Expressing concern over the flight of capital from the state due to migrations, Jagdish Prasad Mohanka, newly elected president of Bihar's Marwari Sammelan, said that in the past eight years, nearly 10,000 Marwari families had either wound up business or were doing so. "And it's not just kidnappings, but the whole atmosphere of insecurity that's responsible for it," he says. A majority of the businessmen from Bhagalpur, once a thriving silk centre, have migrated to Bangalore. Almost 50 per cent of the 1,100 cloth merchants in Muzaffarpur have shifted to Surat, Mumbai or Ahmedabad. Says P.K. Agarwal, former president of the Bihar Chambers of Commerce and Industry: "The exodus of capital from Bihar has been on for several years now. It can only speed up now." Nearly 5,000 small and medium industries have been shut down in the past two decades because of lawlessness. "There is no place in Bihar which is free from rangdars (extortionists)," says Mohanka.

With a per capita annual investment of only Rs 2,200 in Bihar -- the lowest in the country -- the state can ill-afford the migrations. Says Saibal Gupta, an economist with the Patna-based Asian Development and Research Institute: "The investment climate in Bihar is depressing and the flight of capital a matter of grave concern." But the state Government appears indifferent. Providing an environment conducive to business and industry seems pretty low on its list of priorities. That being the case, people like Kumar may also soon be looking for safer environs to do business in.

INCOME-TAX RAIDS
The Noose Tightens

It's nemesis time for Rashtriya Janata Dal (RJD) President Laloo Prasad Yadav and his aides. With the change of guard in Delhi, Central Government agencies have lost no time in closing in on those allegedly involved in corruption cases during the past seven years. Close on the heels of the arrest of a minister in the engineering college admissions scam last month, came the income-tax (IT) raids at over 50 places spread over five states on April 21. The targets included Laloo loyalist, Road Construction Minister Iliyas Husain, the prime accused in the Rs 200 crore bitumen scam.

The extensively planned raids came just three days before it officials were to reply to the Patna High Court as to why the department had failed to recover money reported to have been embezzled in the Rs 800 crore fodder scam. Among those targeted were ruling RJD MLA R.K. Rana, a close Laloo aide in Delhi, Rajya Sabha member Prem Gupta and a host of officials of the Road Construction Department and contractors.

Despite the elaborate planning, however, the swoop lacked an element of surprise. News of the raids had leaked out even before it officials set out, raising doubts about the effectiveness of the whole exercise. Says state BJP General Secretary Saryu Rai: "Without secrecy, we can only wonder how effective the raids were." As an explanation of the leak, a senior it official said they had to ask the state home secretary for a CRPF escort to conduct the raid. This lapse notwithstanding, it officials managed to get some clinching evidence in the bitumen scam. Cash and documents showing investments of about Rs 7 crore were recovered in the seizure, including currency notes of about Rs 25 lakh stuffed in gunny bags found at the residence of Husain's personal assistant Shahabuddin Baig. Officials recovered documents showing remittances worth $65,000 (nearly Rs 26 lakh) from abroad at a flat in Mumbai, allegedly owned by Gupta. He, however, denies the flat belongs to him. But yet another document revealed that the Laloo loyalist owned a flat in Hong Kong. Says S.C. Mishra, director-general (investigations): "Gupta's house was raided because he is suspected of laundering money of a key accused in the scams." The biggest catch, however, was a bunch of signed, blank receipts used in bitumen transactions.

Laloo claimed the raids were an attempt to "humiliate" him. That may just be Laloospeak, but the close coordination between the CBI and the it Department and the Centre's support spells trouble for him. Also, with the departure of "friendly" Governor A.R. Kidwai -- he sat on the CBI's case for prosecution of Laloo in one of the fodder scam cases for six months -- and the arrival of S.S. Bhandari in the Patna Raj Bhavan, clearances are likely to come in faster. The noose seems to be tightening.
-Bharat Desai