For a year, India's Assam Rifles paramilitary force has been engaged in counter-insurgency operations against Communist-backed peasant uprisings against their landlords. The strength of the Assam Rifles and their counter-insurgency training has led the Communists to quickly abandon the tactics used earlier in Telangana. In Telangana, the Hyderabadi government was weak enough that the pesant communes were able to operate independently for years. However, in the current New Tebhaga Movement, a continuous occupation of rural villages is simply impossible and will only result in a bloodbath when the Assam Rifles inevitably retake the village.

Instead, the Communists have begun turning to a different set of tactics. Rather than expelling the landlords and trying to keep them out, the Communists have begun making targeted attacks against the landlords and their families. Ranging from smear campaigns to kidnappings to outright murder, many of the landlords in the Northeast have fled the countryside, taking refuge outside the region. While the Assam Rifles have captured a number of Communist cells, the violence shows no sign of abating. As long as the Communusts have the popular support of the peasantry, they will have an easy time hiding in the rural villages.

Additionally, with the Indian government censoring news of these attacks in an attempt to maintain calm, the Communists have begun other methods of trying to get the word out. Peasants have been organized to march from their villages to the nearest city, where they can spread the news of their predicament by word of mouth. Absence of mainstream reporting on these peasant marches is only arousing suspicion of the government among the citizenry of Calcutta.

One thing the Assam Rifles has accomplished is discovering the source of the weapons the Communists are using. While the weapons are Soviet designs, many have been discovered using replacement parts of Chinese origin, and others have markings on them consistent with their use by the PLA. It is clear that it is the People's Republic of China that has been arming the Communists.

Economic Troubles

While the peasant unrest is more conspicuous in the eyes of everyday Indians, there is a deeper, more pervasive problem brewing in the Indian economy. At its roots, this was a problem started by President Desai, whose belligerent attitude towards Pakistan and Dravida caused a need for an Indian military buildup. However, under Nehru this buildup has continued with India spending more than twice as much in its military as Pakistan and Dravida combined.

While, per capita, India's military spending is still lower than that of Pakistan, India is a net food importer rather than a new food exporter. India has needed to implement a number of financial regulations to keep its currency overvalued in order to prevent food prices from rising beyond the means of its populace. India's limited foreign exchange is needed to pay for both food, weapons, and industrial goods.

It is the combination of limited foreign exchange together with an overvalued currency which has wrecked havoc with India's plans to industrialize. Industries have a hard time getting foreign currency with which to buy industrial supplies and hire foreign experts. Those industries that have been successful created are mostly inefficient due to the limitation for local technology and expertise and based upon import substitution rather than export. Wages have to be kept low to keep industry competitive, which is only fostering labour activism within the country. Exports from Indian industry simply cannot compete with the newer technology due to the overvalued currency.

This means that exports continue to be limited to cash crops such as tea, spices, and cotton. The government's initiatives to try to build agricultural self-sufficiency have only further restricted the amount of good agricultural land available for these cash crops, and the peasant unrest has put many plantations out of business. This means that Indian exports are actually contracting at a time when they need to be expanding.

The remaining foreign exchange available to India is barely enough to buy food and sustain their existing military (by buying parts and ammunition). Relying on loans for further military purchases will only downgrade India's credit, which is already down to a credit rating of B.

To deal with the economic crisis, India's finance minister has demanded that Nehru do the following:

• immediately cease the purchase of any military equipment that cannot be produced domestically

• put a moratorium on further industrial development until the existing industries can be made competitive enough for export

• end the pesant unrest by whatever means necessary