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Topic: money laundering and its prevention.
5. What influence does money laundering have on economic development? Examine the recent steps taken by India to counter money laundering. (250 words)
Difficulty level: Moderate
Reference: The Hindu , Insights on India
Why the question:
The government on Wednesday informed the Supreme Court that ₹18,000 crore was confiscated under the Prevention of Money Laundering Act (PMLA) from fugitive businessmen Vijay Mallya, Nirav Modi and Mehul Choksi, and returned to banks.
Key Demand of the question:
To write about the adverse effects of money laundering on economic development and steps taken to counter it.
Directive word:
Examine – When asked to ‘Examine’, we must investigate the topic (content words) in detail, inspect it, investigate it and establish the key facts and issues related to the topic in question. While doing so we should explain why these facts and issues are important and their implications.
Structure of the answer:
Introduction:
Begin by defining money laundering.
Body:
First, mention in brief as to how money laundering works and its impact on economic development of the nation – economic vulnerability, integrity of the banking and financial services, increased volatility of international capital flows and exchange rates due to unanticipated cross-border asset transfers, increased crimes etc.
Next, write about the statutory and institutional measures that have been developed to tackle the menace of money laundering. Write about their effectiveness in dealing with the menace of money laundering.
Conclusion:
Conclude by writing a way forward to further make anti-money laundering measures more robust.
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