Indian terror groups have become so desperate for funds that they are resorting to robberies and petty thefts to finance their activities, several recent and ongoing cases suggest.

On June 14th, Jharkhand Police arrested five members of the outlawed People's Liberation Front of India (PLFI) after the group raided the residence of a kendu leaf trader, Banwari Gupta, in Palamu district.

"The armed terrorists raided the businessman's house with the intention of collecting a levy to fund their operations in the region," Palamu Superintendent of Police Anup T. Mathew told Khabar South Asia.

"We have arrested five extremists, including a sub-zonal commander of the outfit, and recovered a motorbike, three pistols, several live cartridges and Rs 15 lakhs ($26,859), extorted from other businessmen in the area, from their possession," he said.

The arrested extremists, all from Palamu, included sub-zonal commander Ashok Yadav, Neeraj Singh, Sanjiv Yadav, Akhilesh Yadav and Kamlesh Singh. The men range in age from 25 to 35.

Robbing gold to pay for terror

Meanwhile, one of the most notorious terrorism-related robbery cases promises to yield new intelligence on the Lashkar-e-Taiba (LeT) extremist network, following the May arrest of two suspected perpetrators.

Ten years ago, a gang of men assaulted a gold dealer in Kochi, Kerala, stealing 2.25kg of his gold. Two of them, Ismail (nicknamed Bomb Ismail) and K.P. Shabeer, are now in custody and have allegedly confessed to their role.

The thieves, police say, were part of a robber's gang "operating under the leadership of Tadiyantavide Nazeer, accused in numerous terror cases in his home state of Kerala and in adjoining Karnataka," former Kerala Director General of Police (DGP) K. J. Joseph told Khabar.

"We have evidence that the money [from the heist] … was used to fund the blast at the Ernakulam Collectorate on June 10th, 2009," Thrissur Superintendent of Police P. N. Unnirajan told Khabar. "Earlier, in 2002, some of the heist proceeds were also spent on planting a live bomb at the Coimbatore Press Club."

One of the arrested men, Shabeer, is a brother of the militant K. P. Sabir, who fled India after allegations he was accused of recruiting Kerala youth for the terrorist organisation LeT.

Nazeer, the alleged ringleader, has been in custody since 2009, when he was nabbed in Bangladesh. According to another former Kerala DGP, Raman Srivastava, he has confessed his involvement in two terror-related 2008 car thefts – in Binanipuram and Perumbavoor, respectively.

Busting his robbery gang has severely cramped the LeT's fund-raising efforts, according to authorities. "Currently, the terrorist operators in Kerala are lying low owing to augmented security surveillance," Kerala Crime Branch Inspector Biju K Stephen told Khabar.

"Based on the confessions made by Nazeer, we are now expecting to counteract the sleeper modules of LeT in Kerala," he added.

The case is by no means an isolated one, analysts say.

The state of Madhya Pradesh, known for its famous Chambal ravines, is a safe haven for several notorious dacoit (bandit) groups, according to National Investigating Agency Inspector General of Police Loknath Behera. Police say they have observed links between these gangs and outlawed terror groups like the Indian Mujahedeen (IM) and Student Islamic movement of India (SIMI).

Arrested extremists "have confessed their participation in at least five major bank dacoities, which includes two at Dewas and one each at Mandi, Itarsi, Jaora and Piplia," Madhya Pradesh Inspector General (Anti-Terrorism Squad) Vipin Maheshwari said.

With donations and support on the wane, police believe coffers of both the IM and SIMI are running dry, forcing them to find new ways of financing their activities.