How to make the most of contraband

An auction of seized Red Sander logs could help Andhra Pradesh reduce its fiscal deficit

With the bifurcation of Andhra Pradesh, Telangana, which got Hyderabad, had a surplus budget while residual Andhra slid deep into a deficit. Desperate for money, the Andhra state government has hit upon an unusual idea: auctioning seized logs of wood that will earn it at least Rs 1,000 crore.

Red Sanders, found all over southern Andhra Pradesh, is a red-coloured sandalwood species used for medicinal purposes, apart from making musical instruments and furniture, with demand from China, Japan, Malaysia and Indonesia. These trees grow in Kadapa, Chittoor and Nellore districts, but the sale of their wood was restricted after it was put on the endangered list in the early 80s. For the last few years, the Centre has not cleared any sales of Red Sander, resulting in a spike in its smuggling. An estimated Rs 2,500 crore of Red Sander wood has been smuggled out of Andhra Pradesh in billets, says sources. After a shooting incident last year in which two forest officials were killed by smugglers, the then united Andhra Pradesh government intensified anti- smuggling operations and seized 8,000 tonnes of the wood. The Chandrababu Naidu government, which assumed office in June, kept up the crackdown. And now his revenue-starved state has called for a global auction to sell the seized wood—a little over half of it.

“We asked the Centre to clear the process and received approval to sell 4,000 tonnes of this wood. We will call for global tenders in August and expect to rake in at least Rs 1,000 crore,’’ announced the state’s Forest and Environment Minister B Gopalakrishna Reddy recently.

A tonne of this wood is estimated to command a price of Rs 25 lakh in the overseas market, and state officials believe they are sitting on a huge haul, enough to earn the cash- strapped state at least Rs 2,000 crore.

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