2014 – YEAR OF DESTINY?INDUSTRIAL SECURITY

SCENARIOP IN SOUTH ASIA

By

Maj Gen (Dr) G D Bakshi, SM,VSM (retd)

2014- YEAR OF DESTINY? 2014 is emerging as a critical year in the collective destiny of South Asia.

The US is going to withdraw from Afghanistan. No agreement for residual US military

presence as yet. Pakistan seems determined to reimpose the Taliban in Kabul & hang

Karzai- even as it had hanged Najibullah earlier. Reports of 20 New Mujahid battalions

being raised to help Taliban.

Once Taliban is reimposed in Kabul, Pakistan will have to divert thousands of out of Job

Talibani & other Jihadi cadres towards J&K and the rest of India. Pakistan prussurising USA

to force India to make concessions on J&K. Also India being pressurised not to arm ANA.

Situation in Bangladesh very volatile. Country heading for elections and turmoil. If Khalida

Zia comes to power it will mean great resurgence of Jamat and HUJI. Support to Indian

insurgent groups and Jihadi outfits like Let and IM will rise dramatically.

Maldives govt turning hostile & Islamic. 8 LeT cadres arrested. 3 were trained in Pak.

planning attacks in India via Maldives. Likely to hit coastal targets.

Situation in Nepal is cause for concern. Maoists lost elections – may revert to large scale

violence. No coherent govt in Kathmandu.

TERRORISM

2014- YEAR OF DESTINY? In 2013 Pakistan intensified incidents on the LC to force India to dilute its anti-

infiltration grid. Ceasefire violations rose from just 44 in 2010 to over 120 till Oct.

SF cas increased from just 15 in 2012 to over 51 in 2013.

Infiltration attempts increased from just 247 in 2011 to 264 in 2012 and saw a

very sharp spurt in 2013.

Very high probability of sharp rise in Jihadi violence not only in J&K but the

whole of India next year. LeT and IM will spearhead Jihadi assault in 2014.

LeT likely to launch explosive and small arms vector attacks on high profile

targets. May target industrial infrastructure, Refineries and offshore pipeleines

and infrastructure.

Three Attack Profiles- LET, IM , LWE.

India due for a decisive elections. A hung Parliament could pose a very severe

danger for our polity that could invite attack. Don’t forget – Kargil war took place

when elections were due and we had caretaker govt

ALTERNATIVE FUTURES: INDIA

Threats The Indian Mujahideen emerging as a significant threat. Despite arrests of top leaders like Yasin Bhatkal and Akhtar

Assadulla and over a 100 cadres- IM has become stronger. Group branched out to Afghanistan and Pakistan and its cadres have been fighting alongside the Taliban in Afghanistan.

There are three groups of the IM. Riyaz & Iqbal Bhatkal Group. After 2008 crackdown fled to Dubai and then to Pak. Riaz’s philandering a problem.

Group broke up and a splinter group went to fight along with Taliban in Afghanistan. Mohd Sajid &Mirza Shahdab Beig Group.This group now in Af and tied up with ALQ and Taliban. Amir Reza Khan & Shahnawaz(Unani Doctor Group) This is splinter faction still led by former IM Chief. The top

leadership is from Azamgarh. IED experts , link between SIMI- IM. Still enjoys patronage of ISI. Struck twice in Bihar. IM has developed strong links with criminal gangs. Likely to be more attacks on ATMs and cash vans etc. Forging

strong links with ALQ and Taliban. Pattern of attacks may change once these groups become involved. Let chief Hafiz Sayeed talking of Gazuwa- final war to conquer India. Openly talking of the breakup of India. Despite

Nawaz Shariefs talk of Peace with India has taken no action whatsoever against LET or Hafiz Sayid. In fact his Brother Shahbaz Sharief has donated huge sums to LET. Is Nawaz in control of his Army- ISI? Is it his design to fake peace overtures and let his Army provoke India. Hopes to internationalise the Kashmir issue.

LeT likely to launch explosive and small arms vector attacks on high profile targets. May target industrial infrastructure, Refineries and offshore pipelines and infrastructure. IM likely to go for low strength IED attacks in tandem.

Identity politics leading to a splintering of the polity and a weakening of the very idea of India. Vote bank politics resulting in reduction of pressure and provision of sancturies to Jihadi Tanzeems in some states. Darbhanga in Bihar emerging as major IM sanctuary and recruitment base.

In 1947, India’s population was 350 million. By 2001, had grown to 1.02 billion.

Demproj Computer Program Forecasts

Total Population in 2020 – 1331 Million (1.33 billion)

Population density/Square km – 405

Females per 1000 males – 950

Percentage population in working Age Group (15-65) – 66.3%

Median Age - 27 Years

Dependency Ratio: Child (0-14) and elders (65+) - 51%

Regional Growth Differentials - North and South India:

Population of North India will grow from 450 million in 2000 to 700 million in 2025.

Population of South India will grow from 220 million in the year 2000 to just 265 million in 2025 – making it 19% of overall Indian population (a decline from 22% now)

Population density in North India will rise from 319 per sq km in 2000 to 496/sq km in 2025

Population density in the southern states will rise from 345 per sq km in 2000 to 417 per sq km in 2025.

Population in South India will begin to age by 2025.The median age would rise from 26 years in 2000 to 34 years in 2025. 9% of this would be over 65 years of age.

In contrast the North would have a much younger population with a median age of only 26 years and only 4%in the elderly age group of 65 and above

DEMOGRAPHIC DRIVERS

State-wise Population growth trends:

BIMARU States:– (BIHAR, MP, UP, Rajasthan, Chhatisgarh, Jharkhand, Uttaranchal).Would account for a population growth of 250 million between the year 2000-2025 and account for 50% of India’s overall population in 2025.Of this UP alone would account for 22% of the population share.

Southern States:– (Andhra Pradesh , Karnataka, Kerela, Tamil Nadu) .The population will grow by some 45 million between 2000-2025 and reduce from 22% of the overall Indian population to just 19% in 2025.

Maharashtra’s population would be 10% of the total

West Bengal’s and Gujrat’s population would be 5% each

Delhi NCR would have a population of 4% of the overall population

Security Implications of Regional Imbalances in Population Growth:

The decline in fertility rates in South India will account for a disproportionate rise in the population of North India .This could lead to pressure for migration of the local labour from North to South India. Given the already high population densities in South India and ethnic and linguistic differences, it could lead to social tensions and conflicts.

The inordinately high population rise in UP (22% of India’s total population by 2025) could lead to social tensions and conflicts between the castes as also a rise of Jihadi tanzeems/IM

The inordinate rise of population in the BIMARU states of North India could lead to a rise in the levels of Maoists insurgency and violence. Maoists infiltration of trade unions could lead to violent agitations and overall industrial violence levels will rise.

This could presage a rise in the levels of criminality and gang warfare in North india.

DEMOGRAPHIC DRIVERS

Demographic Youth Bulge: Age Structure of Population

Two views on youth dividend

In quantitative terms the adult population in the working age group (15-65 yrs) Is expected to rise from 604 million in 2000 to 942 million in 2025.

This translates into an overall increase of some 338 million new job seekers into the job market in India.

If the current employment short fall is factored in , we already short of some 145 million(604- 459 million) jobs. The aggregate number of jobs India really needs to generate is almost in the region of 483 million.

DEMOGRAPHIC DRIVERS

Year Percentage population in working age group (15-65)

Optimistic scenario Realistic Scenario

2000 59.8 % 59.8%

2005 62.0% 61.6%

2010 65.0% 63.6%

2015 65.0% 65.2%

2020 68.7% 66.3%

2025 68.3% 67.2%

DEMOGRAPHIC DIMENSIONS OF DEMOGRAPHIC DIMENSIONS OF THREATTHREAT

1.02Bn 1.11 Bn

1.4 Bn

0

0.5

1

1.5

2

2001 2006 2026

Translates into need to create almost 483 million jobs by 2026

62.9% in working age gp (15-64 years)

68.4% in working age gp

IDEOLOGICAL SHADOW

RURAL – URBAN FAULT LINE?

By 2025, India will have to create 483 million new jobs in the country if rising unemployment is to be checked and societal harmony maintained.

Implies the vital need to educate our population and skill our workforce. New workers will have to be shifted largely to the industrial or manufacturing sector because the agricultural sector is incapable of absorbing more .

Indian Planning Commission in its Vision Document envisions adding some 200 million new jobs largely in the small scale and medium scale enterprises by 2020.

So far, India has produced the miracle of jobless growth.

Indian central budget set a target for skilling 9 million youth by 2013-14 in vocational skills. This target has slipped badly and only some 14 lakh youth were skilled in the first 10 months of 2012 as against a target of 85 lakhs.

Govt blundered by raising the overall costs of vocational skilling by bringing the National skills development companies under the ambit of Service Tax( 12.36% plus educational cess of 3%).

Currently there are some 95 firms involved in training youth under the National Skills Development Corporation (NSDC).

The Economic Times estimated that the total work force in India in 2013 was 431.24 million. Of this some 125.65 million were not literate and some 102.38 million were below even primary level of education. The number of graduates in the work force was just 28.01 million. Unfortunately, a large number of our graduates are not employable.

A failure to skill our population and create minimum 200 million new jobs by 2020 could have disastrous social consequences in terms of the rise of violent movements like the Maoists insurgency.

EMPLOYMENT GENERATION

Trade unions will be infiltrated by Maoist organisations – leading to violent agitations that could entail fatal attacks on the management and destruction of property and arson.

The strikes in Maruti plant at Manesar in 2012 indicated the onset of this new and dangerous trend of Industrial violence.

The FICCI and Pinkerton India Risk Survey for 2013 pointed out that Maruti Udyog Limited at Manesar was plagued by labour unrest at its Manesar plant for over a year

This led to a production loss of 83,000 cars or some Rs2500 crores. The risk survey has put Industrial unrest as the highest risk factor for Indian industry at 10.42%.

The next is Political & Governance instability factor at 10.03%, followed by Information and Cyber security at 9.64%and corruption and bribery at 9.48%.

The traditional Fire hazard is ranked next at 8.45%and crime at 8.41%.

Terrorism and insurgency are ranked seventh at 8.33%.

This is followed by Business espionage (8.04%), Accidents (7.29%) , IP Theft(7.25%), Natural Hazards(6.95%)and the survey places workplace violence and sexual harassment at the end at 5.72%.

Companies having HQs outside India however ,put terrorism and insurgency as second highest risk and even Govt and PSU undertakings tended to rate terrorism as the highest risk factor.

in the 26/11 attack on Mumbai , the Taj Hotel not only suffered a loss of revenue and people but also a sharp dip of nearly 17% in their share price of Rs 40.20.

Structural damage amounted to Rs 500 crores and also took its toll on the insurance industry. Financial losses incurred due to Mumbai attack was over US 800 million $. Overseas investors took out 13.5 billion $ from Indian stocks immediately after the incident in 2008 causing the benchmark BSE index to slip to 56%

INDUSTRIAL UNREST

So far India has largely bucked the global trend towards urbanization.

Only 26%of Indian population was living in urban areas by 1991.

36% of India’s population would be living in urban areas by 2025 if the difference in the growth rates of urban and rural population remains constant at 1.5%.

However if the rural urban growth differential rises to 2.0 % in the coming years (which is likely), some 40% of the Indian population would be urban by 2025.

The global urban population has reached 50% and is likely to increase to 60% by 2025.

However, if employment in small and medium scale enterprises increases in India to cater for the youth bulge, it will translate into a major shift of the population towards the small and medium towns, leading to a strain upon the urban infrastructure.

Seasonal migration from the BIMARU states to the South is also likely to increase due to the demographic imbalance in the two regions.

The massive growth of population in UP itself has disturbing consequences for our internal security in terms of recruits for jihadi terrorism as also Maoist violence.

URBANIZATION

In the 11th Plan Period (2007-2011) the Indian economy was growing robustly.

Today the global economy is going through what looks like a prolonged slowdown.

The domestic economy has also run up against internal constraints. Following the fiscal expansion undertaken after the 2008 financial crisis, huge inflationary pressures have built up.

Major investments proposed in energy and transport have slowed down. Changes in tax treatment caused uncertainty amongst investors. This has caused a reduction in the rate of investment.

The Indian economy slowed down to a rate of 6.5% in 2011-12 (the last year of the 11th plan). It has now come down even lower to between 5 to 5.5 % in 2012-13 (the first year of the 12th Five year plan). In fact in the last quarter of 2012, India’s GDP fell to a decade low of 4.5% in the Oct- Dec quarter.

The last three years have been particularly disastrous for the Indian economy. The emphasis on prematurely turning India into a social welfare state by disbursement of huge doles via leaky schemes like MGNREGA has created a huge fiscal defict and fanned inflation.

The Indian GDP growth rate has been halved, inflation rates have been doubled , the Rupee has been devalued by20% and the Current Account deficit stands at a record level of 6.7% of the GDP.

This is a disturbing downturn requiring urgent corrective action.

ECONOMIC DRIVERS

Strong Inclusive Growth: This is the Normative or ‘hoped’ for scenario wherein starting from a 6.7 % GDP growth, the Indian Economy will be able to reach back to 9 % in the final year of the 12th Plan (2012-2017).

Insufficient Action: As the name implies, it would mean that Plans are initiated but not followed through vigorously. GDP growth rate would remain stuck between 6 to 6.5 %.

Policy Logjam: This is the feared end state to be avoided. A policy log jam, a failure to undertake second generation reforms and manage the fiscal deficit, would lead to a decline in the GDP growth rate to between 5-5.5%.

Economic sentiment in India has become fairly depressed.

The Cabinet Committee on Investments has not acted as fast as was hoped.

UPA may have made a serious misjudgement in its focus on entitlements and handouts rather than job creation.

Schemes like MGNERGA have been criticized as being highly wasteful doles involving huge expenditure that could have been more productively spent on creating Infrastructure and jobs.

In a scheme costing around Rs 140,000 crores, the extent of leakage estimated at almost 50%. This could amount to a loss of around US$ 14 Billion.

In 2011-12 capital inflows fell short of its financing needs by over 12 billion $. As a result, India’s Foreign Exchange reserves fell by some 10 billion $ and the Rupee depreciated steeply.

India’s massive imports of Oil and Gold must reduce / be moderated urgently.

ECONOMIC DRIVERS: PLANNING COMMISSION’S ALTERNATIVE ECONOMIC FUTURES

A key driver that will ultimately shape the internal security scenario in India will be the quality of governance. This unfortunately is in sharp decline.

The levels of corruption are rising exponentially. Delivery mechanisms are in sharp of decline.

Most of the problems now are deep and systemic and would need Constitutional Reforms to reshape our polity. The type of politics that we are practicing today, in fact, has become the primary problem.Reckless populism at the cost of the exchequer. Real challenge is short term populism versus long term public good.

Traditional parties have lost the capacity to attract, nurture and promote leadership of quality. Today the key problem is the absence of a visionary leadership with a clear sense of purpose and direction in society.

Mr Subba Rao, The Governor of the Reserve Bank of India (RBI)stated, “The complexity (in India) arises from the political economy. Political executives are much more tempted by short term political payoffs rather than long term sustainability. The Indian growth story is not inevitable. It will not materialize in the absence of vigorous and purposeful structural and governance reforms”.

The fragmentation of the government due to coalition politics has crippled the government’s ability to take long term and national interest driven decisions. in fact ,there is , today a glaring lack of cogent and coherent set of policies.

The Electoral Funding System.

The First Past The Post System: You can get elected only on 10-15% of popular votes. Encourages segmented mobilization and leads to unbrideled identity politics.

GOVERNANCE DRIVERS

ALTERNATIVE FUTURES: INDIA

LEFT WING EXTREMISM (LWE)

FUTURE CHALLENGESFUTURE CHALLENGES

CORRELATION: FOREST COVER & RED CORRIDOR

Polit Bureau

CMC

RegionalBureaus

OrissaChattisgarh

RB

SWRB

North RB

EasternRB

CentralRB

PeoplesMilitia

Zonal MilCommission

35 Members

13 Members

5X

LWE: Organisational Structure of CPI(M)

• PGLA operates in companies.• Known to mass 500+ personnel for major ops.

Peoples Liberation Guerilla Army (PLGA) Coys PLS

TrgMedArtySupOrdIntComn

STR/ MAJ WEAPONS HOLDINGSSTR/ MAJ WEAPONS HOLDINGS

PERS

14-15,000 Armed Cadres

45,000 OGW

1,00,000 Sympathisers

WPNS (15,000)

900 X AK-47/56

200 X LMG

100 X 2”Mors/ GF Rifs

.303 Rif

7.62 SLR

12 Bore

Several Thousand

MAOIST WEAPONS

26

IMPROVISED ROCKETS RECOVERED FROM

TERRORIST

28

IMPROVISED ROCKET IMPROVISED ROCKET LAUNCHERSLAUNCHERS

LWE: EMERGING HYBRID THREAT The most dangerous hybrid threat is CPI (Maoist) From Dalams (squads) have graduated to PGLA Coys and Pls. Have massed

1,000-5,000 cadres for a single operation Could freeze East-West rail communications in a War scenario Some 15,000 armed cadres Highly lethal expertise in IEDs. Have used 70-80kg of explosives to destroy

MPVs Forging a strategic united front with jihadi tanzeems and NE insurgents PLA of Manipur running 6 camps in Orissa, Jharkhand etc.

LWE: EMERGING HYBRID THREAT Pak ISI made bids to contact Maoist leadership through D-Company. Reports of Maoist

leadership being taken to Dubai. Asked for RDX and sophisticated weapons. Said, “Had no need for funds”. Asked by ISI to target infrastructure and industrial complexes.

Chinese Int has est contact with Maoists through PLA and Nepal Maoists China has gifted a factory to manufacture AK-47 copies to Kachin Independence Army (KIA)

rebels in Myanmar to supply sophisticated wpns to Maoists and NE insurgents Need for us to study Seminal Document of Maoists ‘Strategy and Tactics of Indian

Revolution” This is a Heartland and not Rimland Insurgency. Indian Army understandably wants to keep out due to impact on mobilization timings.

However, the Police and CAPFs have failed dismally so far

INDUSTRIAL SECURITY ASPECTS

INDUSTRIAL SECURITY ASPECTS

Questions?