Bhubaneswar, Nov. 21: The Narendra Modi government's demonetisation move has hit Maoists hard, slowing down their activities in their strongholds such as Malkangiri and Koraput, which have not reported any major incidents of rebel violence since the high-value currency notes were scrapped on November 8.

While the rebels have been forced to restrain their operations significantly because of cash crunch, more than 50 of their cadres and militia members have surrendered before police in the past three days. Twenty-four armed militia members laid down arms in Malknagiri today, two days after 33 cadres surrendered before district superintendent of police Mitrabhanu Mohapatra.

"Though we should not link the surrenders to demonetisation, it is true that scrapping of high denomination currency notes has hit them hard," said Mohapatra, adding that banks in the district had been asked to keep tabs on deposits being made with them.

"We are also keen to know if the poor tribal people are being used to convert the scrapped money into legal currency," he said.

Sources said demonetisation had made it hard for the Maoists to buy their daily supplies and hire vehicles for their operations. "Cadres in the Maoists' jungle camps would be forced to move out and look for other means of procuring essential daily use articles if the crisis continues. Given the circumstances they are bound to scale down their operations," said a government officer not willing to be quoted.

Malkangiri is a known Maoist citadel, but the influence of the rebels is said to be on the wane in the area since 24 of them, including two senior leaders, were gunned down in the district on October 24 in a joint operation by Odisha and Andhra Pradesh police. The slain Maoists included Daya, the CPI (Maoist) Koraput divisional committee secretary, and Munna, son of top rebel commander Rama Krishna.

The encounter killings were a big blow to the rebels, who have since issued threats that they would avenge the death of their leaders. Police sources said there was no doubt that the rebels would plan a big operation in retaliation, but any such strike against the security forces would have to be postponed by them in view of the current currency crisis.

"You need money to organise big operations. Logistics is very important. They won't find themselves in a position to carry out such an operation at the moment," said an official.