ECONOMIC COSTS OF NAXALISM: A STUDY OF INFRASTRUCTURE AND INVESTMENT

AUTHOR – AYUSH VIMAL MISHRA & SOHAM PRASHANT JOSHI, STUDENTS AT KES’ SHRI JAYANATILAL H. PATEL LAW COLLEGE

BEST CITATION – AYUSH VIMAL MISHRA & SOHAM PRASHANT JOSHI, ECONOMIC COSTS OF NAXALISM: A STUDY OF INFRASTRUCTURE AND INVESTMENT, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 5 (1) OF 2025, PG. 1006-1009, APIS – 3920 – 0001 & ISSN – 2583-2344.

Abstract

Naxalism, also known as Left-Wing Extremism (LWE), has been a major internal security challenge in India for decades. While its political and social impact is widely discussed, its economic consequences, particularly on infrastructure development and investment, require deeper analysis. This study examines how Naxal violence disrupts public infrastructure, discourages domestic and foreign investments, and increases government expenditure on security. Attacks on railways, roads, power grids, and industrial projects have significantly hindered economic growth in Naxal-affected regions. Furthermore, industries and mining operations face threats, extortion, and destruction, leading to capital flight and reduced business opportunities. The research highlights the rising economic burden on the government due to counter-insurgency measures and the diversion of development funds. To mitigate these economic setbacks, a multi-pronged approach involving security measures, infrastructure development, and employment generation is essential. Strengthening governance, improving public services, and encouraging private investment in these regions can help break the cycle of violence and underdevelopment.

Keywords – Naxalism, Left-Wing Extremism (LWE), economic impact, infrastructure damage, investment decline, industrial disruption, mining sector, foreign direct investment (FDI), security expenditure, counter-insurgency, regional underdevelopment, economic growth.