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1. Hawala Transactions

1.1. Enforcement Directorate (ED)

  • It is a law enforcement agency and economic intelligence agency responsible for enforcing economic laws and fighting economic crime in India.

  • It is part of the Department of Revenue, Ministry of Finance, Government of India.

  • The ‘Enforcement Unit’ of Department of Economic Affairs was renamed as ED in 1957.

What is Hawala system?

  • The word "Hawala" means trust. It is an alternative or parallel remittance system, which works outside the circle of banks and formal financial systems. It is also sometimes referred to as “Underground Banking”.

  • In a hawala transaction, no physical movement of cash is there.

  • This network is being used extensively across the globe to circulate black money and to provide funds for terrorism, drug trafficking and other illegal activities.

1.2. Status of Hawala in India

  • Hawala has been made illegal in India, as it is seen to be a form of money laundering and can be used to move wealth anonymously. The hawala transactions are uncounted since they are not routed through banks.

  • In India, FEMA (Foreign Exchange Management Act) 2000 and PMLA (Prevention of Money Laundering Act) 2002 are the two major legislations which make such transactions illegal and are enforced by Enforcement Directorate.

2. More Financial Powers To DRDO

2.1. About DRDO

  • It was formed in 1958 by the merger of the Technical Development Establishment and the Directorate of Technical Development and Production with the Defence Science Organisation.

  • It is under the administrative control of the Ministry of Defence.

  • Charged with military R&D, it works for enhancing self-reliance in Defence Systems and production of world class weapon systems and equipment in accordance with the expressed needs and the qualitative requirements laid down by the three services.

2.2. Need for delegation

  • India is currently faced with a strategically-vulnerable position of being the world’s largest arms importer due to the abysmal performance of DRDO. It lacks effectiveness and efficiency due to time and cost over runs.

  • Further a major hinderance in its effectiveness is its lax attitude along with the lack of major innovative technological solutions for the country.

  • Its budget continues to hover around 5-6% of the overall defence budget while China spends around 20% of its defence outlay on R&D.

2.3. Recent reforms

  • Central government has delegated greater financial powers to DRDO to neutralise the ill- effects of over centralisation.

  • Bifurcation of the post of scientific advisor to defence minister cum chief of DRDO to enhance functional efficiency.

  • The powers of the DRDO chief (secretary, defence R&D) to sanction projects and procurements have now been enhanced from Rs 75 crore to Rs 150 crore.

  • The powers of the seven directors-general or DRDO cluster heads have gone up from Rs 50 crore to 75 crore.

Way forward

  • As suggested by Rama Rao Committee (constituted to conduct a comprehensive review of DRDO), in 2008 DRDO should focus only on “critical technologies'' of “strategic importance'' and other tasks should be delegated to other agencies for better functioning.

  • Vacancies in DRDO should be filled within stipulated time to enhance functional performance.

  • Focus of DRDO should be on innovative R&D rather than on implementation of other less important tasks such as production of pellet guns.

3. Defence Ministry Issues New Guidelines For Start-Ups

As per DPP-2016, there are two sub-categories of ‘Make’ Procedure:

  • Make-I (Government Funded): It will involve Government funding of 90%, released in a phased manner.

  • Make-II (Industry Funded): Under this, private industry funds the research for the product on its own and develops a prototype. There will be no government funding for developing the prototype but there is an assurance of orders on successful development and trials of the prototype.

  • Ministry of Defence has specified new rules for Indian start-ups to enable them to take part in military projects.

3.1 Significance

  • It encourages new companies to undertake research projects to develop or upgrade weapon systems and to work towards reducing imports.

  • It leverages cutting-edge research and innovation of start-ups.

3.2. New guidelines

  • Under the new rules, start-ups in some certain categories recognised by the Department of Industrial Policy & Promotion (DIPP) will automatically qualify to take part in specified defence projects.

  • For projects with estimated cost of prototype development phase not exceeding INR 3 Crore, no separate technical or financial criteria will be defined for both ‘startups’ and ‘other than startups’, to encourage their participation

  • For relatively smaller R&D projects, the government has simplified rules by removing several regulations required for participation.

  • These new rules apply to the 'Make II’ category of defence procurement.

  • With these rules specified, The Army, Air Force and Navy will now shortlist projects that can be awarded under the category.

4. NSG Commandos To Be Drafted In J&K

About NSG

  • It is an Indian special forces unit under the Ministry of Home Affairs (MHA).

  • It was established in 1984, following Operation Blue Star and the assassination of Indira Gandhi for combating terrorist activities.

  • It is not categorised under Central Armed Police Force (CAPF) but has a special forces mandate.

  • The NSG personnel are commonly referred to as Black Cats because of the black outfit and black cat insignia worn on their uniform.

  • The centre has decided to deploy National Security Guard (NSG) commandos in J&K to fortify counter terror operations.

4.1. More on News

  • Till now NSG has been involved in handling counter terror operations and only the ones which have been of high intensity such as Mumbai terror attacks or pathankot terror attack. The recent move of involving NSG in J&K will include:

  • NSG will train J&K police and other paramilitary forces in room intervention, anti-terror skills, oversee anti-hijack operations at Srinagar airport and deploy its commandoes in intelligence operations.

  • Use specialised sniper guns, Koch mp5 machine guns, through the wall radars etc. to handle militant attacks.

5. Exercise Malabar 2018

About the exercise

  • It is a trilateral exercise between India, Japan and USA.

  • It was started as Indo-US bilateral naval war drill in 1992. Since then it is held annually. Malabar 2018 was the 22nd edition of the naval exercise.

  • Japan joined the exercise as permanent participant in 2015, making it trilateral exercise.

  • The primary aim of this multilateral exercise is to increase interoperability amongst navies of three countries and develop common understanding of procedures for Maritime Security Operations and deepen defence relations between them.

  • Indian Navy participation in this year’s exercises included indigenous stealth frigate INS Sahyadri, fleet tanker INS Shakti, anti-submarine corvevette INS Kamorta and P-8I long-range maritime patrol aircraft.

June Internal Security Threats

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