By Andrew MacAskill and Sanjeev Miglani
NEW DELHI (Reuters) - When a bomb went off last month in West Bengal state, police at India's leading counterterrorism organization had to hail taxis to get to the scene because they did not have enough cars.
The admission by two officers from the National Investigation Agency underlines how poorly equipped it is to fulfill its role of investigating the most serious terrorism cases, cutting off funding to militants and putting suspects on trial.
The NIA's woes are symptomatic of an overstretched intelligence network at a time when Prime Minister Narendra Modi must counter the growing threat of Islamist militants from al Qaeda, and possibly also Islamic State, gaining a foothold in the world's largest democracy.
The NIA has no officers specializing in cyber surveillance, explosives or tracing chemicals and has been forced to ask companies to decrypt computers recovered at crime scenes, officers said.
"The government has its budget constraints; we have done quite well in cracking cases with the resources at our disposal," NIA head Sharad Kumar told Reuters in an interview.
When NIA officers eventually arrived at the scene of the blast in West Bengal, bordering Bangladesh to India's east, what they discovered was important.
Two members of a banned Bangladeshi militant group had blown themselves up building bombs, and the NIA believes they were part of a series of plots to destabilize Bangladesh.
The NIA, which had only opened its West Bengal branch five days earlier, was caught by surprise by the blast, as were other Indian intelligence agencies.It is now investigating the case and says it is struggling to find a dozen senior militant leaders who it said had fled the area after the explosion.
SHOESTRING BUDGET
The NIA was created in response to the siege of Mumbai, India's financial capital, when Pakistani gunmen killed 166 people in a commando-style assault on two luxury hotels, a train station and a Jewish center in 2008.
The agency is seen as India's answer to the Federal Bureau of Investigation's counterterrorism wing, although, despite a population four times that of the United States, it has about 0.5 percent of the funding of its American counterpart.
Before the Mumbai attack, India's security agencies were so riven by conflict and miscommunication that they failed to process warnings about the threat of a sea-borne assault, the government said later, vowing to revamp the state machinery.
Six years later and Modi has yet to lay out plans to overhaul the structure of the security services or improve the information flow between agencies, according to police and intelligence officers.
Since winning power in May, his domestic security focus has been to boost surveillance of suspects in the Muslim community following the rise of Islamic State and to improve intelligence ties with the U.S. and Israel, government officials said.
So far his government has not responded to the NIA's request made months ago to double the staff, recruit more specialists and create a national center of excellence to train officers.
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Smoke and fire billows out of the Taj Hotel in Mumbai November 27, 2008. REUTERS/Jayanta Shaw
A home ministry spokesman declined to comment on those requests, part of a blueprint to overhaul the NIA.
Ajai Sahni, executive director of the Institute for Conflict Management in New Delhi, said there had been "aggression from the new government in its statements and its posturing on terrorism.
"There is no sign of a dramatic transformation in its approach, and until we get that, then the best you can hope for is for the same people to do a little better."
INFIGHTING AMONG INTELLIGENCE GROUPS
Like many countries, India has several intelligence and investigation agencies.
The Intelligence Bureau is the domestic unit and the Research and Analysis Wing is an external spy agency. The military runs its own intelligence wing and so do paramilitary organizations like the Border Security Force.Infighting continues to hinder India's ability to prevent attacks and agencies are often reluctant to share information, according to intelligence officials at these organizations as well as experts.
"The Indian intelligence services have long been plagued by stove piping and failure to share information," said Bruce Riedel, a former senior CIA expert on South Asia who has advised President Barack Obama on policy in the region.
"Modi's new national security adviser, Ajit Doval, a long-time intelligence professional, will have the job of making the services perform at a higher level."
The NIA was supposed to be complemented by a National Counter Terrorism Centre that would sit above other agencies and sift through what they provided, as well as a national intelligence database accessible by other agencies.
But the plan has been stalled by opposition from Indian states concerned about giving up powers to central government.
India's constitution makes law and order primarily a state issue, and NIA officers say part of the problem is that they need help in intelligence gathering from local police, who are typically poorly trained and ill-equipped.
At present, when Indian police arrest suspects there is no way to check if they are wanted, a problem that has led to embarrassing blunders.
Police arrested Yasin Bhatkal, accused of orchestrating a series of deadly bomb blasts, as one of the co-founders of the militant Indian Mujahideen group.
Bhatkal spent months in a West Bengal jail for handling forged currency before he was released four years ago because police were unaware he was on the NIA's most wanted list.
He was finally re-captured in a hideout on India's border with Nepal last year.
The Indian government is working to build a national computer database linking the country's 14,000 police stations. This will allow officers for the first time to check a suspect's background based on fingerprints or iris scans.
WARNING SIGNS
One major concern is that Islamic State and a new branch of al Qaeda in the Indian subcontinent may start to recruit from the world's third-biggest Muslim population, which has largely stayed away from global jihad.
When the NIA's director was asked about local media reports that suggested up to 150 Indians had joined Islamic State fighters in Iraq and Syria, he shrugged his shoulders.
"We don't know, it could be more, it could be less," Kumar said. "We really don't know."
Alarmed by intelligence reports warning of an imminent attack in the eastern city of Kolkata, India's navy withdrew two warships on Tuesday.
A suicide bomb attack at the weekend near the India-Pakistan border, which killed at least 57 people, was designed to stir tension between the rival countries, intelligence sources said.
Over the last six years, officers working at the NIA have secured 31 convictions and more cases are working their way through the courts, India's junior minister of home affairs told parliament in July.
The agency has an annual budget of $16 million and only three quarters of the sanctioned strength of 865 officers.
When the NIA started out it was headquartered at the Centaur Hotel in New Delhi, then ranked the dirtiest hotel in India for three consecutive years by the TripAdvisor website.
The agency moved to a makeshift office in a shopping center on the outskirts of the capital in 2011 before moving into an office close to parliament last year.
"I always felt vulnerable there because it was in a commercial complex and it could have been attacked," said a senior officer at the agency.
"We are slowly building up our capabilities," he said. "It is going to take time. We are doing the best with what we have."
(Additional reporting by Mark Hosenball in WASHINGTON; Editing by Mike Collett-White and Frank Jack Daniel)
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