Insurgent and militant groups in the country, including those in the north east get huge funds from illicit trade in drugs and fake currency, Assam Additional Director General of Police Mukul Sahay said today.
Smugglers pay protection money to various insurgent groups who use these amounts in subversive activities, Sahay told newsmen here.
"A part of the funding to any terror and insurgent organisation, including those in the North East and Assam, comes from illegal trade - mainly of tobacco, drugs and fake currency. This is a phenomenon we have witnessed world over," he said at a press conference on illicit trade organised by FICCI.
Conceding that there might be loopholes in the law, he said it was the lack of implementation that was the biggest problem.
"Police in states like Assam are involved in countering traditional crimes like insurgency and ethnic clash. So, illicit trade has not become a priority of the force yet," he said.
There must be effective coordination between government, industry and enforcement agencies to prevent illegal trade and protect Intellectual Property Rights, the ADGP said.
The FICCI CASCADE (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy) today unveiled its report 'Illicit Market: A Threat to Our National Interest' here.
FICCI CASCADE adviser P C Jha said higher VAT in products such as cigarettes has led to increase in illegal trade.
"This is a very serious issue. The government has to take note of this problem. The need of the hour is more stringent laws along with public awareness," Sahay said.
He said Assam and Meghalay, where VAT on cigarettes is as high as 30 per cent and 27 per cent respectively, are losing a total of Rs 700 crore revenue every year to illicit trade.
Other north east states like Tripura and Sikkim levy VAT on cigarettes at the rate of 25 per cent and 22 per cent, Mizoram and Arunachal Pradesh at 20 per cent, while it is 18 per cent and 13.5 per cent in Nagaland and Manipur respectively, he added.
As per the FICCI report, the total loss on account of the illicit market estimated for 2014 in respect of seven sectors of the manufacturing industry is Rs 39,239 crore, up from Rs 26,190 crore in 2012.
"Amongst the various sectors, the maximum revenue loss to the exchequer on account of counterfeiting and illicit trade is attributed to tobacco products at 23 per cent, estimating a revenue loss of Rs 9,139 crore," it added.
