June 17, 2009 / 12:17 PM / 10 years ago

Maoists kill 3, threaten steel plant construction

KOLKATA, India, June 17 (Reuters) - Suspected Maoist guerrillas killed three members of the ruling communist party in India’s West Bengal state on Wednesday, stepping up their armed campaign to stop the construction of a $7 billion steel plant.

The Maoists, who say are fighting for the rights of poor farmers, are also targeting the state’s long-running communist government for alleged atrocities against farmers.

“The situation is tense. The Maoists continue to unleash violence over a vast area,” said police inspector general Raj Kanojia, adding he was sending more police to the area.

Television pictures showed the rebels, some holding guns and others with bows and arrows, marching in Lalgarh, the town at the centre of the latest row between farmers and industry.

India’s JSW Steel Ltd (JSTL.BO), the country’s third largest steel producer, is setting up the 10-million tonne steel plant near Lalgarh which is 170 km west of Kolkata.

The conflict between industry and farmers reflects a wider battle in India, where efforts to modernise the densely populated country have often met with violent backlashes from villagers who make up more than half of the country’s 1.1 billion plus population.

“We have taken a wait and watch policy to see how the government tackles the situation,” Biswadip Gupta, the Joint Managing Director of JSW Steel, said.

In West Bengal, efforts to set up industries on farmland have infuriated farmers who have violently protested against factories such as a $3 billion chemicals hub complex in Nandigram.

Tata Motors (TAMO.BO) last year shifted their plans to build the Nano car, following protests by farmers in the eastern state.

“If this situation persists for over a month, the impact on industrialisation, which has already been slowed down by recession, would be strongly felt,” Mukul Somany, the eastern region head of the Confederation of Indian Industry (CII) said.

Thousands have been killed in the Maoist insurgency in India which began in the late 1960s, and which Prime Minister Manmohan Singh has described as one of the gravest threats to India’s internal security. (Writing by Bappa Majumdar; Editing by Sanjeev Miglani)

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