UPSC Mains 2026 GS Paper 3 — Question Paper with Model Answers

Model answer · 150 words

The Digital Rupee (e₹) is sovereign currency in digital form — a direct liability of the Reserve Bank, legal tender, and distinct from bank deposits or private cryptocurrencies, which are liabilities of an issuer or of no one at all.

Working. The RBI issues e₹ to banks against a debit to their reserves; banks distribute it to users through wallets. Retail e₹ (e₹-R) is token-based, held in a wallet rather than an account, transferable peer-to-peer without settlement through the banking system, and carries no interest — replicating the anonymity and finality of cash. Wholesale e₹ (e₹-W) settles interbank and securities transactions in central bank money, removing settlement risk.

Progress. Pilots began in November–December 2022 in wholesale (government securities settlement) and retail segments, expanding across cities, banks and non-bank distributors, with programmability for targeted transfers, offline functionality for low-connectivity areas, and cross-border experimentation under Project Nexus-type arrangements.

Adoption remains modest — UPI already solves convenience, so e₹’s real promise is programmability and financial inclusion, not payment speed.

Model answer · 150 words

The view is sound. In an economy where the poor are overwhelmingly self-employed, exclusion from formal finance is exclusion from opportunity itself.

Economic inclusion: a bank account converts irregular income into savings; credit access frees a smallholder or street vendor from moneylenders charging usurious rates; insurance and pension products prevent one illness or crop failure from destroying a decade of accumulation. Jan Dhan accounts made Direct Benefit Transfer possible, cutting leakage and intermediaries.

Social inclusion: accounts in women’s names shift intra-household bargaining power; formal credit histories give identity to those the system never recorded. Exclusion, conversely, tracks caste, gender and geography — it reproduces existing hierarchy.

The FI-Index (base March 2021 = 100) is useful because it is composite and parameter-based — Access (35%), Usage (45%) and Quality (20%) — so it captures whether accounts are used, not merely opened. Its rising trend confirms deepening. Its limitation: it is national, masking district-level and gender gaps.

Model answer · 150 words

Technology Missions apply a mission-mode approach — end-to-end targets, dedicated funding, convergence of research, extension and processing — to a single commodity or constraint.

• Technology Mission on Oilseeds (1986) and its successor National Mission on Edible Oils (oil palm and oilseeds) — reduced import dependence sharply in the late 1980s.
• Technology Mission on Cotton — seed research, extension, market yards and ginning modernisation; India moved from importer to leading exporter.
• Technology Mission on Horticulture / MIDH, including the North-East mission — planting material, protected cultivation, cold chains.
• National Food Security Mission — rice, wheat, pulses, coarse cereals and nutri-cereals through district-level targets.
• National Mission on Natural Farming and the Digital Agriculture Mission — the newer sustainability and data-driven generation.

Role in food security: they addressed availability convincingly, and access partially through income gains. They have been weaker on utilisation — nutritional outcomes lag production — and mission-mode focus on a single crop can distort cropping patterns and deplete groundwater.

Model answer · 150 words

Factors behind inefficiency:

• Fragmented holdings — small marketable surpluses give the farmer no bargaining power.
• Long intermediary chains — the farmer’s share of the consumer rupee falls to 30–40% in perishables.
• APMC monopoly and cartelisation — restricted licences, tacit collusion among commission agents, non-transparent auctions.
• Infrastructure deficits — inadequate cold chains and warehousing force distress sales; post-harvest losses run into thousands of crores annually.
• Information asymmetry — the farmer often does not know the price prevailing in the next mandi.
• Absence of grading and standardisation, which prevents remote and forward selling.

How e-commerce helps: platforms such as e-NAM, FPO-led aggregators and private agri-marketplaces create a single virtual market, disclose real-time prices, permit assaying-based remote bidding, and enable direct farmer-to-consumer or farmer-to-processor sale that compresses the chain. Digital payment ensures traceable, timely settlement.

Caveat: e-commerce fixes information and reach, not logistics — without cold chains and assaying labs it substitutes an online intermediary for an offline one.

Model answer · 150 words

Biotechnology extends shelf life and adds value at the farm gate, converting a perishable into a storable, tradable product.

Example 1 — Enzyme technology in fruit processing. Microbial enzymes such as pectinase and cellulase, produced by fermentation, are used to clarify and increase the yield of mango, guava and apple juice and pulp. Aseptic pulping using such enzymes underpins India’s mango pulp export industry, allowing a crop that spoils in days to be stored for months. Growers in Chittoor and Ratnagiri sell into processing units rather than into a glutted fresh market.

Example 2 — Controlled fermentation and starter cultures in dairy and vegetables. Defined Lactobacillus starter cultures developed by NDRI and CFTRI standardise curd, cheese and probiotic products, and are used in pickling and lactic fermentation of vegetables — converting surplus milk and tomato, which spoil within a day, into shelf-stable products.

Related applications include tissue-cultured disease-free banana planting material and delayed-ripening transgenic research, though the latter awaits regulatory clearance.

Model answer · 150 words

Distinction:

• Neutron energy: a thermal reactor slows neutrons to thermal energies using a moderator (heavy water, light water, graphite); an FBR uses fast neutrons and has no moderator.
• Fuel: thermal reactors use natural or low-enriched uranium (U-235); the FBR uses a plutonium-uranium mixed oxide core surrounded by a depleted-uranium or thorium blanket.
• Breeding: the FBR produces more fissile material than it consumes — U-238 → Pu-239, and in India’s design Th-232 → U-233 — with a breeding ratio above one. Thermal reactors are net consumers.
• Coolant: liquid sodium in the FBR (excellent heat transfer, no moderation) versus water in thermal reactors.

Criticality is the state in which the chain reaction becomes self-sustaining — the effective neutron multiplication factor k = 1, so each fission produces exactly one further fission. Below 1 the reaction dies (sub-critical); above 1 it grows (super-critical). “First criticality” of the PFBR at Kalpakkam marks the moment the reactor first sustains its own chain reaction — the gateway to Stage II of India’s three-stage programme and, eventually, to thorium utilisation.

Model answer · 150 words

The contradiction is real but not absolute: the damage usually comes from the manner of construction, not from construction itself.

The conflict. Hill-cutting for road widening destabilises slopes — the Joshimath subsidence and repeated landslides along Himalayan highway corridors; hydropower tunnelling and reservoir loading in seismic Zone V; construction on Chennai’s Pallikaranai marsh and Mumbai’s Mithi floodplain that converted rainfall into flooding.

How to manage it:

• Carrying-capacity and cumulative impact assessment at basin scale, not project-by-project clearance.
• Risk-informed design — build to disaster-resilient standards and follow the Coalition for Disaster Resilient Infrastructure’s approach; adopt slope-sensitive alignment, tunnelling instead of hill-cutting, and controlled blasting.
• Zonation with teeth — enforce ESZ and CRZ notifications and floodplain zoning rather than regularising violations.
• Nature-based solutions — wetland and mangrove restoration; Odisha’s mangroves demonstrably cut cyclone mortality.
• Institutionalise DRR in DPRs, mandate real-time slope and seismic monitoring, and secure local consent through Gram Sabhas.

Resilience raises upfront cost and lowers lifetime cost — the trade-off is between two accounting horizons, not between growth and safety.

Model answer · 150 words

Adopted at CBD COP-15 (Montreal, 2022), the KM-GBF aims to halt and reverse biodiversity loss and put nature on a recovery path by 2030, towards the 2050 vision of “living in harmony with nature”.

Four goals (2050): protecting ecosystem integrity and halting human-induced extinction; sustainable use and valuation of nature’s contributions; fair and equitable sharing of benefits from genetic resources and digital sequence information; adequate means of implementation.

Key 2030 targets: 30×30 — conserve 30% of land, inland waters and coastal and marine areas; restore 30% of degraded ecosystems; halve invasive alien species introduction; reduce nutrient loss and pesticide risk; reform harmful subsidies and mobilise USD 200 billion a year.

India’s response: an updated National Biodiversity Strategy and Action Plan (2024) with 23 national targets; the Biological Diversity (Amendment) Act, 2023; expansion of protected areas, Ramsar sites (now the largest network in Asia) and community and conservation reserves; Mission LiFE; the MISHTI mangrove initiative and Amrit Dharohar for wetlands; Green Credit Programme; and the International Big Cat Alliance.

Model answer · 150 words

The threat. Disinformation converts rumour into mobilisation at network speed. Doctored videos have triggered communal riots (Muzaffarnagar 2013) and mob lynchings over child-lifting rumours; false messages precipitated the 2012 exodus of North-East students from Bengaluru and Pune; deepfakes now threaten electoral integrity and the credibility of public officials; hostile state actors and terror groups use it for radicalisation and recruitment; financial rumours can trigger bank runs. The damage is done before verification arrives, and forced internet shutdowns impose a further economic and rights cost.

IT Rules, 2021 — salient features: due-diligence obligations on intermediaries, with loss of safe harbour under Section 79 for non-compliance; a Grievance Officer, Nodal Contact Person and Chief Compliance Officer for significant social media intermediaries; grievance resolution timelines and 36-hour takedown of unlawful content; traceability of the first originator for messaging platforms; a three-tier oversight structure with a Code of Ethics for digital news and OTT.

2022–23 amendments: Grievance Appellate Committees; obligations on online gaming and, controversially, a government fact-check unit for content about government business — struck down as unconstitutional by the Bombay High Court in 2024.

Model answer · 150 words

Ladakh abuts the LAC with China and, through Kargil, the LoC with Pakistan. A sparse, remote population is both the first casualty of conflict and the military’s first line of intelligence — hence the emphasis on winning consent rather than merely holding ground.

BADP (Ministry of Home Affairs, since 1986–87), now under the Vibrant Villages Programme umbrella for the northern border, is a centrally sponsored scheme covering blocks along the international border. It funds last-mile infrastructure — link roads, footbridges, schools, primary health centres, solar lighting, drinking water, community halls, tourism and sports facilities — with priority to villages closest to the border. Participatory planning through district-level committees and village panchayats aims to check out-migration, since a populated border is a monitored border.

Army civic action under Operation Sadbhavana: Army Goodwill Schools, medical and veterinary camps in high-altitude villages, vocational training and youth employment drives, national-integration tours, sports and adventure programmes, and disaster relief during flash floods and avalanches — the Army is often the only responder available.

Sustained impact requires local ownership and dignity, not gratitude alone.

Model answer · 250 words

Energy security means uninterrupted availability of energy at an affordable price — and India must secure it while tripling energy demand and decarbonising simultaneously.

Challenges

• Import dependence: over 85% of crude oil and about half of natural gas are imported, concentrated in West Asia — exposing India to price shocks, freight and insurance disruption, and chokepoints such as Hormuz and the Red Sea.
• Coal lock-in: coal supplies most electricity; domestic coal is high-ash and quality-constrained, yet a rapid exit threatens jobs and grid stability.
• New import dependence: critical minerals — lithium, cobalt, rare earths — and solar cells and modules are dominated by a single supplier country, substituting one vulnerability for another.
• Grid and storage: variable renewables need balancing; storage capacity, transmission corridors and flexible generation lag behind capacity addition.
• DISCOM finances: accumulated losses and cross-subsidy make cost-reflective tariffs politically hard and choke investment.
• Access quality: universal connection is achieved; reliable, affordable supply is not, and clean cooking transition remains incomplete.

Measures

• Diversify sources — Russia, USA, Guyana, Africa; expand strategic petroleum reserves beyond current phases; take equity in overseas assets through OVL.
• Accelerate the domestic transition — 500 GW non-fossil capacity, National Green Hydrogen Mission, ethanol blending, PM-KUSUM and rooftop solar under PM Surya Ghar, and nuclear expansion including SMRs and the three-stage programme.
• Build resilience — PLI for cells and modules, National Critical Mineral Mission and KABIL acquisitions, battery and pumped-storage capacity, and a strong energy-efficiency push through PAT, star labelling and building codes, which is the cheapest megawatt available.
• Reform — DISCOM privatisation and smart metering, gas-market and carbon-market development, and just-transition planning for coal districts.

Security, affordability and sustainability are reconcilable only through diversification — of fuels, suppliers and technologies.

Model answer · 250 words

India hosts the world’s third-largest startup ecosystem, with over 1.5 lakh DPIIT-recognised startups and more than a hundred unicorns spread across every state rather than two metros.

Contribution

• Entrepreneurship: they have made enterprise a first career choice rather than a fallback; the Startup India ecosystem, incubators and Atal Tinkering Labs have widened the funnel to tier-2 and tier-3 cities.
• Innovation: problem-solving for Indian conditions — UPI-based fintech, agritech advisory and FPO aggregation, edtech in vernacular languages, healthtech diagnostics, and space startups such as Skyroot and Agnikul that opened a sector once monopolised by ISRO.
• Employment: over 17 lakh direct jobs reported by recognised startups, plus indirect gig and logistics employment; women lead roughly half of recognised startups, and formalisation brings social-security coverage.
• Wider effects: deepening of domestic venture capital, reverse brain drain, and export of software and services.

Challenges. Globally: funding winters driven by high interest rates in source markets, valuation corrections, dependence on foreign capital and consequent regulatory exposure abroad, geopolitical restrictions on cross-border investment, and competition from deep-pocketed global platforms. Domestically: thin domestic risk capital and near-absence of venture debt; regulatory friction and compliance load; long and uncertain public-procurement cycles; weak commercialisation of university research; talent shortages in deep tech; the burden of the reverse flip for firms redomiciling to India; data-protection and gig-work regulation costs; and cash-burn business models that scale losses rather than value.

Measures. Deepen domestic capital through the Fund of Funds, SIDBI and pension and insurance participation; operationalise the ₹1 lakh crore RDI corpus and the Deep Tech Fund of Funds; simplify taxation and ease the reverse-flip; strengthen GeM-linked public procurement preferences; build university tech-transfer offices; and expand patent facilitation and regulatory sandboxes.

Model answer · 250 words

In the mid-1960s India imported wheat under PL-480 in a “ship-to-mouth” existence. Today it is a net exporter of cereals with buffer stocks well above norms, and the world’s largest producer of milk, pulses, spices and jute.

How the transformation happened

• Technology: the Green Revolution — Norman Borlaug’s semi-dwarf wheat, IR-8 rice, and Indian varieties bred by M.S. Swaminathan and the ICAR network — raised yields where irrigation existed.
• Inputs and irrigation: fertiliser, certified seed, tubewell expansion, rural electrification and major canal projects.
• Institutions: MSP and assured procurement by FCI, the CACP, buffer stocking and the PDS; the Agricultural Prices Commission gave farmers a price floor that made investment rational.
• Credit and research: bank nationalisation and priority-sector lending, RRBs, NABARD, and the ICAR–SAU–KVK research-extension chain.
• Beyond cereals: Operation Flood and the Anand cooperative model in milk; the Blue Revolution in fisheries; the Yellow Revolution in oilseeds.

Policies for diversification

• Horticulture: MIDH and the National Horticulture Mission — horticulture output now exceeds foodgrain output.
• Allied sectors: Rashtriya Gokul Mission, National Livestock Mission, PM Matsya Sampada Yojana, Animal Husbandry Infrastructure Development Fund.
• Crop shift: the National Food Security Mission’s pulses and nutri-cereal components, the Crop Diversification Programme in the Green Revolution states to move paddy area to maize, pulses and oilseeds, and the International Year of Millets push through the Shree Anna initiative.
• Value addition and markets: PM Kisan Sampada Yojana and PMFME for food processing, the ₹1 lakh crore Agriculture Infrastructure Fund, 10,000 FPOs, e-NAM, and natural and organic farming missions.

The unfinished agenda is nutritional security and the ecological cost — groundwater depletion and soil degradation — of the very success achieved.

Model answer · 250 words

Types of support in India

• Input subsidies: fertiliser (nutrient-based subsidy and urea price control), power for irrigation pumps, canal irrigation charges below cost, seed and machinery subsidies.
• Output price support: MSP for 22 mandated crops with procurement, PM-AASHA, and sugarcane FRP.
• Income support: PM-KISAN direct transfer; state-level schemes such as Rythu Bandhu and KALIA.
• Credit and risk: interest subvention on crop loans, Kisan Credit Card, and PM Fasal Bima Yojana premium subsidy.
• Infrastructure and marketing: Agriculture Infrastructure Fund, warehousing, e-NAM, transport and marketing assistance for exports.
• Consumer-side: food subsidy through PMGKAY and the NFSA, which is also a support to procurement.

The WTO Agreement on Agriculture disciplines three pillars — market access, domestic support and export competition — and classifies domestic support into Amber Box (trade-distorting, capped by de minimis at 10% of the value of production for developing countries), Blue Box (production-limiting), and Green Box (minimally distorting, uncapped).

Issues for India

• The external reference price for computing product-specific support is frozen at 1986–88 prices, which inflates India’s calculated subsidy far beyond economic reality.
• Public stockholding for food security: procurement at MSP counts as Amber Box support; India breached the ceiling on rice and relies on the Bali Peace Clause (2013) as an interim shield, seeking a permanent solution that developed members have blocked.
• Asymmetry: developed countries shifted large payments into the Green Box, keeping support intact while capping developing-country instruments.
• Domestic distortion: input subsidies skew cropping towards water-intensive paddy and urea overuse, damaging soil health.

India’s position — protecting subsistence farmers and public stockholding, and pressing for the Special Safeguard Mechanism — is defensible; the domestic reform of shifting from input to income and infrastructure support is both WTO-friendly and ecologically sound.

Model answer · 250 words

Mission Drishti is the maiden commercial Earth-observation mission of the Bengaluru startup GalaxEye, launched on 3 May 2026 aboard a SpaceX Falcon 9 from Vandenberg. At roughly 190 kg it is the largest privately built Indian satellite, placed in a sun-synchronous low Earth orbit.

Salient features: a single platform carrying both an optical imager and a synthetic aperture radar; onboard edge AI that fuses the two data streams in real time and downlinks analysis-ready imagery rather than raw frames; sub-metre-class effective resolution; and an entirely indigenous design, assembled and tested in India under the IN-SPACe framework that opened space activity to private players after 2020.

Imaging techniques

• Optical (passive) imaging: reflected sunlight in the visible and near-infrared bands gives high spatial detail, natural colour and spectral information for vegetation and water indices — but is defeated by cloud, haze and night.
• Synthetic Aperture Radar (active): the satellite emits microwaves and, using its own forward motion, synthesises a much larger effective antenna to achieve fine azimuth resolution. Being self-illuminating and long-wavelength, SAR sees through cloud, smoke and darkness, and is sensitive to surface roughness, moisture and structure. Interferometric and polarimetric processing add deformation measurement and scattering-based classification.
• Sensor fusion — “OptoSAR”: the two co-registered views are merged on board, so radar’s all-weather reliability is combined with optical clarity and colour in one product.

Why a world first: every previous mission carried optical or SAR, with fusion attempted later on the ground using images from different satellites taken at different times. Drishti is the first to place both sensors on one platform and fuse them onboard in real time. Applications: border surveillance and defence ISR, disaster response, crop and environmental monitoring, and infrastructure planning.

Model answer · 250 words

Agentic AI refers to systems that pursue a goal autonomously — planning a sequence of steps, invoking external tools, acting on the environment and revising their approach from the results — instead of returning a single response to a single prompt. The shift is from a tool that answers to a system that acts.

Working. A large foundation model serves as the reasoning core. Given an objective, it (i) decomposes the goal into sub-tasks, (ii) plans an ordered approach, (iii) acts by calling tools — search, databases, APIs, code execution, robotic actuators, (iv) observes the outcome, and (v) reflects, correcting course and looping until the goal is met. Persistent memory carries context across steps, and multi-agent architectures assign specialised agents to sub-tasks under an orchestrator. Human-in-the-loop checkpoints gate consequential actions.

Applications. Customer service that completes a refund end-to-end rather than raising a ticket; software engineering agents that write, test and fix code; scientific discovery agents that design and run experimental loops in materials and drug discovery; supply-chain agents that re-route consignments during disruption; in India, agents in agricultural advisory across languages, tele-consultation triage, grievance redress on public portals, and autonomous drones for survey and inspection.

Advantages: handling long, multi-step workflows; round-the-clock operation; scale of routine administration; and productivity gains, particularly for a services-led economy.

Risks: autonomous action multiplies the cost of error; hallucinated intermediate steps propagate; goal misspecification produces harmful optimisation; cascading failures across chained agents; prompt injection and data exfiltration; automation of white-collar work; opacity of decisions; and a real accountability gap — who is liable when an agent acts?

Challenges: reliable evaluation, audit trails, compute and energy demand, data protection compliance under the DPDP Act, 2023, and a regulatory approach — as under the India AI Mission and the principles of “safe and trusted AI” — that neither stifles adoption nor abandons oversight.

Model answer · 250 words

Urban India generates over 1.7 lakh tonnes of municipal solid waste a day, and the binding constraint is not technology but segregation at source and municipal capacity.

Challenges: low source segregation despite mandates; legacy dumpsites — Ghazipur, Bhalswa, Okhla, Deonar — that burn, leach and collapse; weak municipal finances and understaffed ULBs; unscientific landfilling with little processing; informal waste-pickers excluded from formal systems despite doing most recycling; rising plastic and e-waste; NIMBY resistance to processing sites; and poor enforcement of user charges.

Policy framework: the Solid Waste Management Rules, 2016 — mandatory source segregation into wet, dry and domestic hazardous streams, Extended Producer Responsibility, bulk-waste-generator duties, integration of waste-pickers, and user fees; supported by the Plastic Waste, E-Waste, C&D Waste and Bio-medical Waste Rules; Swachh Bharat Mission-Urban 2.0 with its garbage-free-city goal and legacy-dumpsite bioremediation; GOBARdhan and SATAT for waste-to-CBG; Swachh Survekshan rankings and star ratings as competitive federalism at city level; and the Environment Protection Act and NGT oversight.

Indore — five-star, repeatedly India’s cleanest city. Its success rests on 100% door-to-door collection with GPS-tracked vehicles and separate compartments for six waste streams; genuine source segregation enforced by spot fines and sustained IEC campaigns through NGOs, schools and residents’ associations; decentralised composting plus Asia’s largest bio-CNG plant at Devguradia running municipal buses; bioremediation of the Devguradia legacy dump into green space; and — decisively — political continuity, an empowered municipal commissioner and cost recovery through user charges.

Delhi — the counter-case. Fragmented jurisdiction across MCD, NDMC, DDA and the state, chronic municipal indebtedness, low segregation, over-reliance on unsegregated waste-to-energy plants that emit and underperform, and three towering legacy landfills. The lesson: governance unity and citizen behaviour, not machinery, decide outcomes.

Model answer · 250 words

The statement is largely valid. The community is the first responder — it is present before any agency arrives, and the golden hours after an earthquake or a flash flood belong to neighbours, not to the NDRF.

Why it is the cornerstone

• Speed: in the Bhuj earthquake and in the Uttarakhand and Kerala floods, most early rescues were by local people; in Kerala 2018, fishermen’s boats saved thousands.
• Local knowledge: communities know flood marks, safe routes and vulnerable households — the elderly, disabled, pregnant women — better than any GIS layer.
• Last-mile warning: Odisha’s cyclone success — from 10,000 deaths in 1999 to near-zero in Phailin and Fani — rested on trained village task forces, cyclone shelters managed by shelter-management committees, and door-to-door evacuation of over a million people.
• Recovery and resilience: SHGs and community kitchens in relief; community-based mangrove and embankment maintenance; traditional water harvesting in drought areas.
• Legal basis: the Disaster Management Act, 2005 and NDMA guidelines mandate community-based disaster preparedness and Aapda Mitra volunteers; Sendai Framework Priority 4 is built on it.

Challenges: awareness fatigue and disbelief between events; exclusion of women, Dalits and migrants from village committees, so their vulnerabilities go unaddressed; a persistent top-down, relief-centric official culture; migration hollowing out village task forces; funding tied to relief rather than preparedness; and mock drills reduced to paperwork.

Measures: fund and audit village and ward Disaster Management Plans; institutionalise Aapda Mitra with refresher training and insurance; embed DRR in school curricula and NSS/NCC; use panchayats, SHGs and faith networks as delivery channels; ensure inclusive representation; adopt common alerting protocols with community sirens; and link preparedness to livelihood incentives.

Model answer · 250 words

Separatism in J&K has drawn on contested accession narratives, the political vacuum after the 1987 election, Pakistan’s proxy strategy after 1989, and an overground network — the Hurriyat and allied bodies — that supplied ideology, funding and street mobilisation to armed militancy.

Constitutional and political action

• Abrogation of the special status under Article 370 and Article 35A, and the J&K Reorganisation Act, 2019 creating two Union Territories — upheld by the Supreme Court in 2023, which also directed restoration of statehood and elections.
• Delimitation (2022) and the 2024 Assembly elections, conducted peacefully with high turnout — the strongest available answer to the boycott politics of the separatists.
• Extension of central laws and reservation for Paharis, Gujjars-Bakerwals and Valmikis; three-tier panchayati raj with DDC elections, devolving funds and functions to elected local bodies.

Security and counter-terror: a coordinated grid across the Army, CAPFs and J&K Police; NIA and ED action on the terror-funding network, with the Jamaat-e-Islami and JKLF banned under UAPA and Hurriyat factions dissolving or dissociating from separatism; targeting of narco-terror and hawala routes; strengthened anti-infiltration obstacle systems along the LoC.

Development and outreach: the ₹80,000 crore PM Development Package; the Chenab rail bridge and USBRL connectivity, tunnels, AIIMS and IIT/IIM institutions; industrial policy and investment summits; Mission Youth, sports and skilling to counter radicalisation; return of tourism and the Amarnath Yatra; and rehabilitation and relief measures for displaced Kashmiri Pandits.

Militancy recruitment and stone-pelting incidents have fallen sharply. The unfinished tasks — restoring statehood, sustaining political dialogue and creating jobs — determine whether mainstreaming becomes irreversible.

Model answer · 250 words

Terrorism is cheap to execute but expensive to sustain. Counterfeit currency and laundering supply the sustaining money — and both are economic offences with a security payload.

Fake Indian Currency Notes (FICN). High-quality counterfeits, produced in specialised presses abroad and pushed through Nepal, Bangladesh, Thailand and the Gulf, serve a double purpose: they finance cadres, couriers and safe houses, and they attack the currency itself by eroding confidence and injecting unaccounted purchasing power. Distribution rides on hawala networks, border haats and, increasingly, courier parcels. Demonetisation and the new security features disrupted the existing stock, but improved counterfeits reappeared within a few years.

Money laundering. The classic placement-layering-integration cycle now runs through shell companies, trade-based laundering by over- and under-invoicing, real estate, bullion, charitable and NGO fronts, casinos, and cryptocurrency mixers and peer-to-peer transfers. Hawala remains the workhorse because it leaves no paper trail. Narco-terrorism links — the Golden Crescent heroin route into Punjab and drone-dropped consignments — merge drug proceeds with terror funding.

Domestic response (briefly): PMLA and the Enforcement Directorate; UAPA amendments allowing designation of individual terrorists; the NIA and the Terror Funding and Fake Currency Cell; FIU-IND; and the Financial Intelligence framework under RBI KYC norms.

International action: the FATF — 40 Recommendations, mutual evaluations, and the grey and black lists, which impose real reputational and capital costs (India’s 2024 evaluation placed it in the “regular follow-up” category); the UN Security Council Resolution 1373 and its Counter-Terrorism Committee, plus the 1267 sanctions regime; the International Convention for the Suppression of the Financing of Terrorism (1999); the UN Convention against Transnational Organized Crime and UNCAC; the Egmont Group of financial intelligence units; Interpol channels; and bilateral MLATs and treaties. India also pushes the long-pending Comprehensive Convention on International Terrorism and the “No Money for Terror” ministerial process.