UPSC CARE Mains Practice 3rd April 2026
Mains Practice Questions for the Day
- Q. The 1973 Oil Price Crisis demonstrated how energy resources can be used as a geopolitical weapon. In the context of recent disruptions in West Asia, analyse the causes and consequences of the 1973 crisis and examine its relevance for present-day global energy security. (15 M)
- Q. The proposed FCRA Amendment Bill, 2026 seeks to strengthen regulation of foreign contributions in India. Critically examine its key provisions and discuss the concerns associated with it. (15 M)
Q. The 1973 Oil Price Crisis demonstrated how energy resources can be used as a geopolitical weapon. In the context of recent disruptions in West Asia, analyse the causes and consequences of the 1973 crisis and examine its relevance for present-day global energy security. (15 M)
(GS Paper III – Economy, International Relations – Energy Security, Global Economic Developments)
Introduction:
The 1973 Oil Price Crisis was a major global economic shock triggered by an oil embargo imposed by Arab members of OPEC against countries supporting Israel during the Yom Kippur War. It marked the first large-scale use of energy resources as a geopolitical weapon, leading to a sharp rise in oil prices and long-term structural changes in the global economy and financial system.
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1. Causes of the 1973 Oil Crisis
- The crisis was rooted in geopolitical tensions in West Asia, particularly the Yom Kippur War (1973), where Arab nations opposed Israel and its Western allies.
- The immediate trigger was US support to Israel, prompting Arab OPEC nations to impose an oil embargo.
- Additionally, underlying economic factors such as rising global demand, inflationary pressures, and lack of spare production capacity in the US amplified the shock.
- Arab countries were also dissatisfied with the devaluation of the US dollar after the collapse of the Bretton Woods system (1971), which reduced their oil revenues.
- Thus, the crisis was both a political and economic assertion of control by oil-producing nations.
2. Consequences of the Crisis
- The most immediate impact was a fourfold increase in oil prices, which triggered global inflation and economic slowdown (stagflation) in many advanced economies.
- It led to energy shortages, fuel rationing, and policy shifts toward energy conservation.
- A major long-term outcome was the emergence of the ‘petrodollar system’, where oil trade was denominated in US dollars, strengthening US economic dominance.
- For developing countries like India, the crisis resulted in a massive rise in import bills, inflationary pressures, labour unrest, and increased dependence on external financial institutions like the IMF and World Bank. Politically, it contributed to instability and policy shifts in several nations.
3. Relevance in the Contemporary Context
- Recent disruptions such as the blockade of the Strait of Hormuz echo the 1973 crisis, highlighting the continued vulnerability of global energy supply chains.
- However, unlike 1973, current crises involve physical disruptions in supply routes in addition to geopolitical tensions, making them potentially more severe.
- The episode underscores the persistent strategic importance of West Asia, the risks of overdependence on fossil fuels, and the need for diversification of energy sources.
- It also highlights how energy can still be leveraged for geopolitical influence in a multipolar world.
4. Way Forward for Energy Security
- Countries must focus on diversifying energy sources by accelerating the transition to renewable energy and reducing dependence on volatile regions.
- Strengthening Strategic Petroleum Reserves (SPR) can provide a buffer against supply shocks.
- Enhancing international cooperation and diplomatic engagement is crucial to ensure stability in key chokepoints like the Strait of Hormuz. Additionally, prudent macroeconomic management is required to control inflationary pressures arising from energy shocks.
Conclusion:
The 1973 Oil Crisis fundamentally reshaped global economic and geopolitical dynamics by demonstrating the strategic power of energy resources. Its lessons remain highly relevant today, as the world faces renewed disruptions in energy supply. Ensuring energy security through diversification, cooperation, and sustainable alternatives is essential to mitigate future crises.
Q. The proposed FCRA Amendment Bill, 2026 seeks to strengthen regulation of foreign contributions in India. Critically examine its key provisions and discuss the concerns associated with it. (15 M)
(GS Paper II – Governance, Constitution, Polity – NGOs, Civil Society, Accountability & Transparency)
Introduction:
The Foreign Contribution (Regulation) Act (FCRA), 2010 regulates the acceptance and utilization of foreign funds by individuals and organizations in India. The FCRA Amendment Bill, 2026 seeks to introduce a stricter regulatory framework, particularly for managing foreign-funded assets when an organization’s registration ceases. While aimed at safeguarding national interest and ensuring accountability, it has raised concerns regarding autonomy of civil society institutions.
Body
1. Key Provisions of the Bill
- The Bill proposes the creation of a Designated Authority empowered to take over and manage foreign contributions and assets when an organisation’s registration is cancelled, surrendered, or expires.
- It expands the definition of “ceased registration” to include cases where renewal is not sought or denied, thereby widening the scope of regulatory control.
- The provision for provisional and permanent vesting of assets introduces a mechanism where assets may temporarily or permanently come under state control depending on the organisation’s status.
- Additionally, the Authority is empowered to dispose of assets, including transferring them to government bodies or crediting sale proceeds to the Consolidated Fund of India.
- The Bill also expands restrictions on foreign funding to include individuals engaged in news production, thereby broadening the scope of prohibited entities.
2. Significance of the Amendment
- The Bill aims to enhance transparency and accountability in the use of foreign funds by ensuring proper management of assets when organisations cease to operate.
- It seeks to prevent misuse of foreign contributions that may affect national security, public order, or sovereignty.
- The introduction of a designated authority provides a structured mechanism for asset oversight, reducing ambiguity in cases of deregistration. It also aligns with the broader objective of strengthening regulatory oversight in a rapidly evolving civil society landscape.
3. Concerns and Criticisms
- Critics argue that the Bill may lead to excessive state control over civil society, potentially undermining the autonomy of NGOs, especially those working in sensitive sectors.
- The provision for permanent vesting and disposal of assets raises concerns regarding proportionality and property rights.
- Expansion of restrictions to individuals engaged in news-related activities may affect freedom of expression and press independence.
- Additionally, the requirement of prior government approval for investigations could weaken enforcement by introducing procedural delays and executive discretion.
- Concerns have also been raised about the potential for selective targeting, particularly of minority-led institutions.
4. Way Forward
- There is a need to strike a balance between national security and civil society autonomy by ensuring that regulatory provisions are proportionate and transparent. Clear guidelines must be framed for asset management to avoid arbitrary actions.
- Strengthening independent oversight mechanisms and judicial review can enhance accountability.
- Further, consultation with stakeholders, including NGOs and experts, can help create a more balanced and effective regulatory framework.
Conclusion:
While the FCRA Amendment Bill, 2026 seeks to strengthen oversight of foreign contributions and safeguard national interests, its provisions raise important concerns regarding civil liberties and institutional autonomy. A balanced approach that ensures transparency without undermining democratic space is essential for effective governance.
