Revision summary
Curbing terrorism needs intelligence fusion, police capacity, borders and coasts, lawful investigation, and a political track in long conflicts. Diplomacy and FATF-type pressure target State and overseas sponsors. Major funding sources are State support, hawala, narcotics, counterfeit currency, diverted charity, extortion, and trade or crypto laundering. UAPA, PMLA, the Financial Intelligence Unit, and UN listings are the legal money tools. Force without politics, or politics without follow-the-money, leaves the menace intact.
Model answer
Copper italics in this answer — like this — are the key facts. Each one is unpacked in the Facts & figures rail.
Introduction
Terrorism uses fear and spectacular violence against civilians (and often the State) to force a political aim. For India it is a national-security problem on the Pakistan-linked jihadist belt, in the North-East, in leftover Left-wing extremism where it shades into terror tactics, and in lone-wolf / module form after online radicalisation. Curbing it is not one commando raid. It is intelligence, law, borders, money, and politics together. Money is the oxygen the second part of the question names.
Body
Solutions to curb the menace
- Intelligence fusion: Multi-Agency Centre, NATGRID-type data, and State Special Branches that talk to the Intelligence Bureau before the blast, not in the debrief. Human sources still beat a dashboard.
- Police as the first counter-terror force: city SWAT, forensic labs, and witness protection; the Army is for the border and a few theatres, not every module in a metro.
- Borders: fencing, floodlights, and Integrated Check Posts where they help; boats and coastal radar after 26/11; aviation and hotel security as a permanent drill, not a anniversary memo.
- Law: Unlawful Activities (Prevention) Act with judicial oversight so it does not become a lazy substitute for investigation; fast terror courts; National Investigation Agency for inter-State and cross-border cases.
- Military and Central Armed Police in Jammu and Kashmir and the North-East under a political track: deradicalisation, jobs, and honest politics so the gun is not the only career. Hard power without a political door recreates the next cohort.
- Cyber: take down propaganda, watch encrypted plots within the law, and counter-speech from credible local voices — not only a ban that drives users darker.
- Diplomacy: isolate State sponsors at the United Nations, Financial Action Task Force, and bilateral extradition; evidence dossiers, not only adjectives.
- Community and prisons: prevent radicalisation in madrasa fringes and in jails; work with genuine faith leaders; protect minorities from the backlash that feeds the next recruiter.
- Left-wing and North-East: mix of SAMADHAN-type police pressure, talks where groups bargain in good faith, and development that is not only a road for the paramilitary.
Major sources of terrorist funding
- State sponsorship and intelligence-agency slush: training, arms, and cash across a land or sea border.
- Hawala and cash couriers: the old informal rail that still outruns many bank alerts.
- Narcotics: Afghanistan–Pakistan heroin and other drugs; the golden crescent link to terror groups is a documented overlap (narcoterror).
- Counterfeit currency: high-quality fake Indian notes as a dual attack on the economy and a funding stream.
- Charities and NGOs that mix genuine alms with diversion; misuse of zakat and front trusts.
- Crime: kidnapping, extortion, bank robbery, and taxation of contractors in insurgent space (also typical of some North-East and Maoist finance).
- Legal businesses and real estate as layering; trade-based money laundering (over-invoicing).
- Online: crowdfunding, cryptocurrency, and payment wallets — a rising slice even if hawala still dominates in the subcontinent.
- Diaspora donations that are political on the surface and operational underneath.
Choking the money
- Prevention of Money Laundering Act, UAPA terror-finance clauses, UN listings, and FATF pressure on neighbours.
- Financial Intelligence Unit alerts, know-your-customer on informal value transfer, and cooperation with Gulf and Western banks.
- Demonetisation-type cash shocks are blunt; targeted follow-the-money on modules works better than a nationwide note ban as counter-terror.
- Freeze of SIMI / LeT / JeM-type fronts and of stone-pelting or riot funds when the law’s evidence standard is met.
Flow diagram
flowchart TD T[Terrorism] --> OPS[Modules attacks] T --> FUN[Funding] FUN --> SRC[State hawala narcotics fake notes fronts crime] SOL[Intel police borders UAPA NIA] SOL[SOL] --> OPS[OPS] FIU[FIU PMLA FATF] --> FUN POL[Political cyber community] --> T
Conclusion
Terrorism is curbed by fused intelligence, a professional police, tight coasts and borders, lawful UAPA-and-NIA work, a political door in long theatres, and diplomacy that names sponsors. Funding comes from States, hawala, drugs, fake notes, fronts, crime, and newer crypto rails. Cut the money and the module shrinks; leave the politics untouched and the next module raises a new purse.
Quick related
Students also ask
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'Terrorism is emerging as a competitive industry over the last few decades." Analyse the above statement.
Next question on this syllabus topic (2016 · Q18). View answer →
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Is military action the main solution inside Indian cities?
No. Cities need police, intelligence, and courts. The military is for borders and specified disturbed theatres.
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Why is terror finance as important as catching the shooter?
A module without cash cannot travel, buy detonators, or house a team. Listing and hawala cases shrink the next attack.
Same topic · past papers
UPSC has asked this before
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