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With authorities clamping down on funds coming through the Dubai channel, militants in Jammu and Kashmir have now started resorting to 'extortion' to meet their daily needs even as investigating agencies were trying to expose the entire ramifications of the funding racket.
The state administration along with central agencies began their crackdown since first week of December last year and netted a whopping Rs 18 million in just two weeks, official sources said.
While Jammu and Kashmir Chief Minister Farooq Abdullah said that concrete steps were being taken to choke funds for anti-national elements, senior police officials in the state feel that agencies like the CBI and Directorate of Revenue Intelligence should step in as the funds, after being received through hawala channels, came into the valley from the national capital.
The J&K police assisted by central intelligence agencies carried out six operations in the state during which it nabbed 15 people, including a prominent carpet businessman, and netted a whopping Rs 18 million that had come through Dubai, the sources said.
"The exact ramifications of the funding were yet to be ascertained. We do not have the expertise to deal with an economic crime of this nature," acting Inspector General of Police (Kashmir range) Ashok Bhan said.
He said there were reports that militants had started collecting money from the public after the hawala route began drying up.
Admitting that much attention was not being given to the squeezing of funds to militants, a senior government official said, "After the implementation of the Prevention of Terrorism Ordinance (POTO), things have started moving and we can now also act under section 22 of the ordinance."
Security agencies feel that promulgation of the ordinance created a widespread scare among the separatist outfits.
Recently, the authorities clamped down on second rung leadership of the Hurriyat Conference and arrested some of them for allegedly collecting and supplying money to their masters.
The money was being routed through Dubai, where Pakistan's ISI has targeted Kashmiri businessmen for carrying out its nefarious activities, the sources said.
The reason why the ISI chose this route is that some of them also doubled up as messengers between the militants and Hurriyat leaders.
An example of this came to light after the arrest of a hawala dealer Afzal Safi Mir, in December, who also acted as a conduit between Hizbul Mujahideen supremo Syed Salahuddin and firebrand Jamaat-e-Islami leader Syed Ali Shah Geelani, the sources claimed.
Though the channel has been flourishing for the last four years, since the past two years it has become very active as ISI conduits had not been successful in routing the money through Nepal.
Confessions by various militants have revealed that the ISI and controllers of some of the militant outfits in Kashmir had started sending money to carpet dealers, who were mainly natives of Kashmir.
Originating from Pakistan, money is routed through various channels to these carpet dealers in Dubai who accommodate this in their book of accounts by over invoicing their business and show huge profits, the sources said.
The money is then sent to India using hawala channels, the sources said.
The carpet dealers have revealed that it was easy money for them as they used to get a commission (15 per cent for every 100,000). The hawala dealer who used to make the final delivery was also given a commission, they added.
The Dubai connection came to light in March 2000 when police intercepted one person at the border of J&K and Punjab and recovered Rs 3.30 million from him, which was meant for the People's League, one of the constituents of the Hurriyat Conference, the sources said.
The militants started feeling the heat last year when state police and intelligence sleuths gathered evidence against some of the Dubai-based carpet dealers, the sources said.
Some of these carpet dealers were picked up from the posh Lajpat Nagar area in south Delhi, which threw more light on the entire ramifications of the Dubai channel of funding militancy and the separatist movement in J&K, they said.
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