GS Paper III — Q20
Give out the major sources of terror funding in India and the efforts being made to curtail these sources. In the light of this…
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. (Answer in 250 words) 15 marks
हिंदी में प्रश्न पढ़ें
भारत में आतंकवाद के वित्तपोषण के प्रमुख स्रोत और इन स्रोतों की कटौती के लिए किए गए प्रयासों को बताइए। इस आलोक में, हाल ही में नई दिल्ली में नवंबर 2022 में हुई 'आतंकवाद के लिए धन नहीं (एन. एम. एफ. टी.)' संगोष्ठी के लक्ष्य एवं उद्देश्य की भी विवेचना कीजिए। (उत्तर 250 शब्दों में दीजिए)
Model answer
Written by UPSC Answer Check against this question's marking rubric, to the 250-word length. UPSC does not publish answers for Mains — this is one way to score well, not an official key.
Terror financing sustains subversive networks, posing a grave threat to national security.
Major Sources of Terror Funding in India
- Illicit Channels: Cross-border smuggling of Fake Indian Currency Notes (FICN), informal Hawala networks, and proceeds from the narcotics trade traversing the Golden Crescent and Golden Triangle (narco-terrorism).
- Formal and Associational Avenues: Misuse of non-profit organisations, shell companies, foreign remittances, and extremist fronts like the banned Popular Front of India (PFI).
- Emerging Technologies: Crowdfunding platforms, the dark web, and decentralized Virtual Digital Assets (cryptocurrencies) that offer anonymity.
Domestic Efforts to Curtail Funding
- Legislative Measures: Amendments to the Unlawful Activities (Prevention) Act (UAPA) enabling the designation of individuals as terrorists and seizure of properties; stringent enforcement under the Prevention of Money Laundering Act (PMLA) and FEMA.
- Institutional Architecture: Creation of the Terror Funding and Fake Currency Cell (TFFC) within the National Investigation Agency (NIA), alongside transaction monitoring by the Financial Intelligence Unit (FIU-IND).
- Structural Disruption: Demonetisation, enhanced border surveillance, and multi-agency coordination to disrupt counterfeit currency and illicit cash flows.
NMFT Conference (New Delhi, 2022): Aims and Objectives India hosted the 3rd Ministerial 'No Money for Terror' (NMFT) Conference, drawing delegates from over 75 nations to align domestic action with global frameworks. Key objectives included:
- Global Norm Setting: Strengthening the implementation of Financial Action Task Force (FATF) standards, proposing a permanent NMFT secretariat, and eliminating "safe havens."
- Countering New Technologies: Formulating unified protocols to regulate Informal Value Transfer Systems (IVTS), darknet channels, and virtual assets.
- Capacity and Cooperation: Enhancing real-time intelligence sharing, technical capacity-building, and standardising asset-freezing mechanisms.
Way Forward While domestic enforcement via the NIA and FIU-IND has choked traditional routes, addressing decentralised digital terror financing requires eliminating geopolitical double standards and institutionalising real-time, cross-border intelligence cooperation.
What "Discuss" is asking you to do
Lay the issue out from more than one side — how it arose, what is claimed for it, what is held against it, and where it now stands. UPSC attaches discuss to broad topics with several live dimensions, so coverage of the dimensions earns more than the strength of your opinion.
Structure that answers it
Set the issue up → the case as it is made → the case against → the dimension both sides leave out → where the balance now lies
Where marks are lost
Listing facts with no thread between them, or arguing one side throughout and calling it a discussion.
How this answer will be evaluated
Approach
Framework: Security: classify threat, vulnerability, response; stay calm. discuss: intro > 3-4 dimensions > example > balanced close Full marks: Precise sources mapped to specific legal/institutional responses; clear analysis of NMFT conference's role in global counter-terror finance.
Key points expected
- List major sources (e.g., hawala, narcotics, state sponsorship)
- Detail legal/institutional efforts (PMLA, FIMA, NABARD)
- State specific aim/objective of the NMFT conference
- Link conference outcomes to curtailment of funding sources
Evaluation rubric
Each sub-part is marked on its own, against the marks and word limit printed on the paper.
- The answer Identify terror funding sources, curtailment efforts, and analyze the NMFT conference's objectives. 15 marks · 250 words
discuss— intro → 3-4 dimensions → example → balanced close
Must cover
- List major sources (e.g., hawala, narcotics, state sponsorship)
- Detail legal/institutional efforts (PMLA, FIMA, NABARD)
- State specific aim/objective of the NMFT conference
- Link conference outcomes to curtailment of funding sources
Loses marks
- Generic 'fighting terrorism' without specific funding mechanisms
- Ignoring the specific NMFT conference details
- Listing sources without corresponding curtailment efforts
Earns more
- Mention specific agencies (ED, NIA, FIU-IND)
- Reference international cooperation (UNSCR 1373)
- Mention specific illicit trade (drugs, arms)
- Mention specific conference outcomes (e.g., FATF compliance)
Extra mark
- Cite specific PMLA section or FIMA provision
- Mention specific NMFT conference resolution or declaration
Practice this exact question
Write your answer and it is marked point by point against the model answer above — what you covered, what you missed, what you got wrong.
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