UPSC Mains 2023 GS3 Q20: model answer
Give out the major sources of terror funding in India and the efforts being made to curtail these sources. In the light of this, also discuss the aim and objective of the ‘No Money for Terror (NMFT)’ Conference recently held at New Delhi in November 2022.
What the question wants
Sources of terror finance, India's counter-efforts, and the NMFT conference.
How to structure it
Intro: money as terror's oxygen. Body: (1) Sources: state sponsorship from across border, hawala, fake currency, drugs (narco-terror), extortion and taxation by insurgents and Maoists, NGOs and charities misuse, crypto, crowd-funding, smuggling; (2) Efforts: UAPA, PMLA, NIA, TFFC cell, FICN coordination group, ED, FIU-IND, FATF engagement (Pakistan grey list), demonetisation claims, crypto under PMLA; (3) NMFT 2022: third ministerial conference, 18–19 Nov 2022, Delhi, 70+ countries; aims: global trends, emerging tech, crypto, international cooperation, permanent secretariat proposal. Conclusion: global cooperation and tech-enabled tracking.
- 1(1) Sources: state sponsorship from across border, hawala, fake currency, drugs (narco-terror), extortion and taxation by insurgents and Maoists, NGOs and charities misuse, crypto, crowd-funding, smuggling
- 2(2) Efforts: UAPA, PMLA, NIA, TFFC cell, FICN coordination group, ED, FIU-IND, FATF engagement (Pakistan grey list), demonetisation claims, crypto under PMLA
- 3(3) NMFT 2022: third ministerial conference, 18–19 Nov 2022, Delhi, 70+ countries
- 4Aims: global trends, emerging tech, crypto, international cooperation, permanent secretariat proposal
Model answer
Money is the oxygen of terrorism.
- 1Detect: FIU-IND, bank alerts
- 2Investigate: NIA, ED
- 3Seize: UAPA, PMLA attachment
- 4Regulate: FCRA, crypto under PMLA
- 5Cooperate: FATF, NMFT
Major sources of terror funding
- State sponsorship from across the border, especially for groups in Jammu and Kashmir.
- Hawala networks moving money outside the banking system.
- Fake Indian currency notes printed abroad.
- Narco-terror: drug trafficking through Punjab and the Golden Crescent and Golden Triangle routes.
- Extortion and 'taxes' by Maoists and North-East insurgents on businesses and contractors.
- Misuse of NGOs and charities.
- New channels: cryptocurrencies, crowd-funding and online gaming apps.
Efforts to curtail them
- Laws: the Unlawful Activities (Prevention) Act and the Prevention of Money Laundering Act; virtual digital asset providers brought under PMLA in 2023.
- Agencies: NIA's Terror Funding and Fake Currency Cell, ED, FIU-IND and DRI.
- FCRA amendments (2020) tightened foreign funding of NGOs.
- FATF: India's diplomacy helped keep Pakistan on the grey list from 2018 to 2022.
- Banning fronts: organisations like PFI were banned in 2022.
The No Money for Terror (NMFT) Conference, New Delhi, 18–19 November 2022
- The third ministerial conference of the series (after Paris 2018 and Melbourne 2019), hosted by the Ministry of Home Affairs and attended by over 70 countries and international bodies.
- Aim: deepen global cooperation to cut off terror funds.
- Objectives: discuss global trends in terror financing; the use of formal and informal channels; emerging technologies such as crypto and crowd-funding; and international cooperation.
- India called for no 'good' or 'bad' terrorism, action against states that fund terror, and proposed a permanent secretariat for NMFT.
Terror finance crosses borders easily, so only coordinated, tech-enabled global action can choke it.
Keywords, cases and data to drop in
hawala FICN narco-terror UAPA FATF NMFT 2022
Where most answers lose marks
- Skipping the NMFT part.
- No specific agencies or laws.
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Question text as printed in the official UPSC question paper: https://www.upsc.gov.in/sites/default/files/QP-CSM-23-GENERAL-STUDIES-PAPER-III-180923.pdf The model answer is original Battle IAS work; use it to learn structure, not to memorise.