However, law enforcement agencies closely monitored the activities of these groups and several activists were arrested. Terrorism in Manipur continues to be influenced by the activities of groups based in the other Northeastern States, particularly Nagaland. One of the problems facing Manipur is the ethnic conflict between Nagas and another major tribal group in the State, Kukis. The Kukis have been struggling for a separate State within the Indian Union since the late 1980s. Though tension prevails between the Kukis and Nagas in certain areas of the State, the situation has remained largely peaceful with only two incidents of violence reported in the year 1999 and none in year 2000.
Reports indicate that a minister had attended the funeral of a top-ranking terrorist.
A few ministers are alleged to have also provided financial support apart from their official cars and bungalows to the terrorists. MHA reports have also indicated the subversion of civilian administration in the State. Senior administrative officials functioning in an insecure environment, with extortion by terrorists posing a serious problem, have adopted the path of least resistance. Official reports indicate that even senior state officials and politicians are paying extortion money demanded by the terrorists, and openly negotiate the levels at which the extortion amounts from various departments are to be fixed . Terrorist groups have made inroads into the functioning of government departments, including interference in government contracts, development projects, supply and bill clearances.