The scourge of terrorism is a grave challenge to national security. What solutions do you suggest to curb this growing menace ? What are the major sources of terrorist funding ?
Approach · directive: “what solutions / what are the major sources”
What it asks · Suggest measures to curb terrorism and name the main sources of terrorist funding.
It asks 2 things — answer each
- Suggest solutions to curb terrorism
- Identify the major sources of terrorist funding
Open with · Terrorism strikes at the State's first duty, the safety of its citizens, and survives on money, arms, ideology and safe havens; the FATF's 2024 evaluation placed India in 'regular follow-up', its highest category, while urging it to turn financial investigations into convictions.
Cover
- Sources of funds: hawala and illegal money transfers, counterfeit currency, drug trafficking, smuggling, and extortion or ransom demands.
- Sources of funds: misuse of charities and donations, state sponsorship, cyber fraud, front companies and, in some regions, extortion in mining and construction.
- Intelligence and policing: better sharing among agencies and States, NIA and NATGRID, strong local police and border and coastal surveillance.
- Legal and financial action: the Unlawful Activities (Prevention) Act provisions on raising funds, Prevention of Money Laundering Act, financial intelligence and FATF norms.
- Countering radicalisation: community engagement, deradicalisation, monitoring of online recruitment, and education and jobs for vulnerable youth.
- Diplomacy: pressure through the UN, FATF and bilateral cooperation to end safe havens; capacity building and quick response forces such as the NSG.
- Balance: measures must respect due process and human rights so that action against terrorism does not erode trust of the affected communities.
Close with · Terrorism yields to a whole-of-nation response, sharp intelligence, dried-up finance, fair and fast justice and communities that trust the State, backed by the Comprehensive Convention on International Terrorism that India has long pressed for.
Add value (verified)
- FATF adopted India's Mutual Evaluation Report in its June 2024 Plenary (Singapore), placing India in the 'regular follow-up' category.PIB: FATF adopts Mutual Evaluation Report of India in its June 2024 Plenary (Department of Revenue, 28 June 2024) ↗“FATF Places India in the ‘regular follow-up’ category Posted On: 28 JUN 2024 3:06PM by PIB Delhi India has achieved an outstanding outcome in the Mutual Evaluation conducted during 2023-24”
- A Terror Funding and Fake Currency Cell has been set up in the National Investigation Agency to investigate terror funding cases.PIB: Strategy to deal with Terror Financing and Money Laundering (Ministry of Home Affairs) ↗“a Terror Funding and Fake Currency Cell has been set up in the National Investigation Agency to investigate Terror Funding cases.”
- UAPA Section 17 (as amended in 2013): punishment for raising, providing or collecting funds for a terrorist act, from legitimate or illegitimate sources, in India or abroad.The Unlawful Activities (Prevention) Act, 1967, Section 17 — Ministry of Home Affairs (India Code text) ↗“17. Punishment for raising funds for terrorist act.—Whoever, in India or in a foreign country, directly or indirectly, raises or provides funds or collects funds, whether from a legitimate or illegitimate source”
- The Prime Minister delivered the inaugural address at the third 'No Money for Terror' Ministerial Conference on Counter-Terrorism Financing in New Delhi on 18 November 2022.PMO: PM delivers the inaugural address at the third 'No Money for Terror' Ministerial Conference, New Delhi (18 November 2022) ↗“PM delivers the inaugural address at the third ‘No Money for Terror’ (NMFT) Ministerial Conference on Counter-Terrorism Financing, in New Delhi (November 18, 2022)”
Question: UPSC's CS (Main) 2017, GS Paper III — paper ↗. Approach: Minimalist IAS, checked 3 Oct 2026 (how we verify) — UPSC publishes no model answers. ·
Model answer· 371words · Minimalist IAS
Terrorism strikes at the State's first duty, the safety of its citizens, and survives on money, arms, ideology and safe havens. The FATF's 2024 evaluation placed India in 'regular follow-up', its highest category, while urging it to turn financial investigations into convictions.
Solutions to curb terrorism
- Intelligence fusion: strengthen the Multi-Agency Centre and NATGRID, integrate State intelligence and share actionable inputs in real time.
- Policing and borders: State police as first responders; fenced and electronically watched borders; coastal security with marine police and the Coast Guard; NSG hubs for rapid response.
- Law and courts: the UAPA, fast-track terror trials, witness protection and NIA reach across States.
- Financial choke: PMLA, the Financial Intelligence Unit and FATF standards to trace and freeze funds; NIA's Terror Funding and Fake Currency Cell investigates terror-funding cases.
- Counter-radicalisation: monitor online recruitment, engage community leaders, run deradicalisation, and expand education and jobs in Jammu and Kashmir, the Northeast and LWE districts.
- Diplomacy: press the Comprehensive Convention on International Terrorism at the UN; use FATF and UN sanctions listings; India hosted the third 'No Money for Terror' ministerial conference in New Delhi (November 2022).
- Rights and trust: due process, no collective punishment and accountable forces, so counter-terrorism does not create the next recruit.
Major sources of terrorist funding
Terror finance: Hawala; Fake currency; Narcotics; Extortion; State sponsors; Charity diversion; Cyber and crypto
- Hawala: informal transfers that leave no banking trail.
- Fake Indian currency notes pushed through neighbouring countries; UAPA Section 15 treats producing or circulating high-quality counterfeit currency as a terrorist act.
- Narcotics from the Golden Crescent and Golden Triangle, with gold and arms smuggling.
- Extortion, ransom and 'levies' on contractors, mining and transport, especially by left-wing extremists.
- State sponsorship by hostile agencies, and charities, NGOs and diaspora donations diverted from their stated purpose, countered by FCRA scrutiny.
- Cyber fraud, front companies and virtual currencies.
- Legal counter: Section 17 punishes raising, providing or collecting funds, from any source, knowing they may be used for a terrorist act, with five years to life.
Terrorism yields to a whole-of-nation response: sharp intelligence, dried-up finance, fair and fast justice and communities that trust the State, backed by cooperation across borders through the Comprehensive Convention on International Terrorism India has long pressed for.
Prepared by Minimalist IAS to the answer standard of Shivam Singh (mentor, 7 years) · facts checked against official sources (how we verify) · updated 3 Oct 2026. UPSC publishes no model answers: compare your structure and coverage with this, then write your own.
