Jorhat, Feb. 18: Police have provided personal security officers (PSOs) to a few traders in Demow, a small town in Sivasagar district, after several businessmen received extortion demands from Ulfa (Independent) recently.

Demow is about 17km east from Sivasagar district headquarters and is nearly 390km from Guwahati.

Fear has gripped the traders after two persons, including a businessman, were killed in a blast at nearby Sepon on Friday in which Ulfa (I)'s hand is suspected.

Biren Agarwalla, the owner of the house in whose compound the explosion took place, had reportedly received an extortion demand of Rs 5 lakh sometime back.

Agarwalla's nephew Situ and driver DimbeshwarBhuyan were killed in the blast.

He told the police that he had not given any money to the militants.

Police sources said in the past fortnight a large number of businessmen in Demow had received demand letters, reportedly by Ulfa (I). These letters were dropped in front of doors of business establishments at night.

The letters were signed by senior Ulfa leader Jiban Moran, the outfit's 'finance secretary'.

The letters carry demands ranging from Rs 20,000 to Rs 10 lakh with warning to 'comply with the request' or face dire consequences.

Sources said only a few traders had lodged formal complaints with the police after receiving extortion threats. Many others had informed the police unofficially.

To allay the traders' fear, the police have stepped up security arrangements in Sivasagar district, particularly at Demow. As part of the enhanced security, the police have decided to temporarily provide PSOs to two businessmen there.

The deputy inspector-general of police (eastern range), Satyen Gogoi, told this correspondent today that the PSOs had been allotted on a temporary basis after reviewing threat assessment of the persons receiving extortion demands.

'The superintendent of police has the power to grant PSO to a person temporarily if the threat assessment to his life is found to be at a high level,' Gogoi said.

He said the police had appealed to the traders not to panic and had assured them that PSOs would be provided to other businessmen as well, if the situation so demands, to ensure their safety.

Gogoi said the businessmen have been urged to cooperate with the police by informing them about any phone calls made in the name of Ulfa (I) asking them to pay to their cadres or any other persons reportedly 'authorised' by the outfit to collect money.

The Paresh-Barua led Ulfa (I), in recent times, has been reportedly 'hiring' gangs to carry out extortions and other subversive activities.

Gogoi said the police had arrested several persons, including dacoits and thieves, in the five Upper Assam districts since last year for making extortion demands.

They said the oufit Ulfa (I) was trying to increase its strength in Upper Assam before Prime Minister Narendra Modi's visited the state in November last year.

The outfit has gunned down a few people, including traders, and triggered several blasts in Tinsukia and Dibrugarh districts, leading to the deaths of five persons.

They also sent extortion notices to contractors and tea planters in Upper Assam.