Daily Prelims Notes 10 November 2024

Daily Prelims Notes

10 November 2024

Table Of Contents

1. Impact of Exits of Foreign Institutional Investors’ (FIIs) from Indian Markets and response of Domestic Investors
2. New guidelines for treatment of Type 2 diabetes from International Diabetes Federation soon
3. Ransomware attack hit key defence unit last year: DoPT
4. India will fail to meet 2025 TB ‘elimination’ target
5. World Urban Forum spotlights Africa’s urbanisation & climate challenges

1. Impact of Exits of Foreign Institutional Investors’ (FIIs) from Indian Markets and response of Domestic Investors

Sub: Eco

Sec: External Sector

• Record FII Outflow in October 2024:
  • October 2024 saw the highest-ever FII outflow, with ₹94,017 crore withdrawn from Indian stock markets.
  • This peak outflow surpassed previous significant FII exits, including:
    • March 2020 – the beginning of the COVID-19 pandemic.
    • June 2022 and March 2022, which also recorded substantial FII exits but were notably lower than October 2024.
• Short-Term Volatility in Indian Stock Markets:
  • The massive FII exit has contributed to increased short-term volatility.
  • Experts caution that volatility may persist in the near term if FII outflows continue.
• Domestic Institutional Investors (DIIs) as Market Stabilizers:
  • DIIs, including mutual funds, insurance companies, and pension funds, have continued to buy Indian equities, offsetting FII sales.
  • In October, DIIs invested around ₹1 lakh crore in Indian stocks, helping to stabilize the market amidst FII outflows.
  • This consistent DII buying is driven by confidence in India’s medium-term growth potential.
• Global Factors Influencing FII Exits:
  • The FII sell-off is largely driven by global economic factors, including:
    • Rising U.S. bond yields, which present attractive investment alternatives for FIIs.
    • China’s recent economic stimulus measures, such as reduced reserve requirements, lower mortgage rates, and easier borrowing access for institutional investors, making Chinese markets more appealing.
    • Political uncertainties in the U.S., particularly with the upcoming elections, adding an element of risk for FIIs.
• Sectoral Analysis of FII Outflows:
  • FIIs reduced investments in several sectors, signalling weakening trends:
    • Construction materials, automobiles, IT, oil & gas, consumable fuels, and textiles experienced significant FII outflows.
    • In contrast, DIIs saw the current market correction as an opportunity to buy quality stocks at lower prices.
• Divergence in Investment Sentiments Between FIIs and DIIs:
  • FIIs, characterized as opportunistic investors, often seek quick returns and react to global factors.
  • DIIs, including domestic mutual funds, insurance firms, and pension funds (e.g., EPFO, National Pension System), display confidence in India’s growth story and remain long-term investors.
  • DIIs’ purchases are largely supported by systematic investment plans (SIPs) averaging ₹15,000 crore per month, which provide steady capital inflows into the market.
• Future Outlook:
  • Analysts believe that domestic investors and pension funds will play a crucial role in offsetting FII outflows in the medium term.
  • Although short-term volatility may continue, DIIs’ steady investments suggest that Indian markets could stabilize, driven by structural DII investments in retirement assets and systematic investments.

Background on Climate Finance Targets:

• COP15 Copenhagen Agreement (2009):
  • Developed countries committed to collectively mobilize $100 billion per year by 2020 to support developing countries in climate adaptation.
  • However, there was ambiguity in defining what constitutes climate finance, with differing views on whether clean energy investments or existing economic development funds should be included.
• OECD’s Claim (2022):
  • The Organisation for Economic Cooperation and Development claimed that the $100 billion target had been achieved.

New Collective Quantified Goal (NCQG) on Climate Finance:

• Need for a New Target:
  • At COP26 (2021), it was agreed that more funding is required to meet Paris Agreement goals:
    • Reduce global emissions by 45% by 2030.
    • Keep global temperature rise below 2°C compared to pre-industrial levels.
  • Since 2022, discussions have been ongoing to establish a new target, known as the NCQG, to be set by 2025.
• Current Debates on NCQG:
  • Proposed targets range from $1 trillion to $1.5 trillion with a commitment period until 2035.
  • The only consensus so far is that the NCQG must build upon the existing $100 billion as a minimum baseline.
• Purpose of NCQG:
  • To establish a new climate finance target beyond the current $100 billion annual goal
  • Aims to better reflect developing countries’ needs and priorities
  • Intended to support climate action in developing countries
• Key Features of NCQG:
  • Focus on both mitigation and adaptation
  • Consideration of loss and damage funding
  • Emphasis on quality and accessibility of finance
  • Inclusion of various financial sources (public, private, bilateral, multilateral)

Concerns Raised by India:

• India’s Perspective on Financing:
  • Open to diverse forms of climate finance, including:
    • Grants.
    • Concessional loans from multilateral banks.
    • Investments in technology.
  • Opposition to classifying business-as-usual investments as climate finance.
  • Resistance against attempts to include developing countries like India and China under new categories such as “major economies” for NCQG contributions.
• Key Official’s View:
  • Progress is unlikely if climate finance focuses on short-term profit motives or includes countries outside the Paris Agreement’s scope.

2. New guidelines for treatment of Type 2 diabetes from International Diabetes Federation soon

Sub : Sci

Sec: Health

New IDF Guidelines for Type 2 Diabetes:

• The International Diabetes Federation (IDF) is preparing new global guidelines for managing Type 2 diabetes, which will be officially launched at the World Congress in Bangkok in April 2024.
• The guidelines are being developed by an expert panel led by Prof. Antonio Ceriello and IDF President Peter Schwarz, and are designed to address the unique needs of diverse populations worldwide.

Key Features of the New IDF Guidelines:

1. Patient-Centric Approach:
   • Focuses on tailoring diabetes care based on the local healthcare environment rather than relying solely on the availability of advanced medications.
   • Emphasizes putting the patient, not drugs, at the center of the care model.
2. Global Applicability:
   • The guidelines aim to be practical for use in both high-income and low-income countries, unlike existing guidelines from the American Diabetes Association (ADA) or the European Association for the Study of Diabetes (EASD), which may not consider affordability and accessibility issues globally.
3. Flexibility and Basic Care Standards:
   • Sets a minimum, basic level of diabetes care that should be a universal right, regardless of the economic status of a country.
   • Insulin remains the recommended first-line therapy, rather than newer, more expensive drugs like GLP-1 receptor agonists including semaglutide, which have limited availability and unproven long-term safety data.
4. Addressing Drug Affordability and Access Issues:
   • The guidelines caution against recommending costly drugs like GLP-1 receptor agonists as first-line treatments due to limited accessibility, affordability, and potential shortages.
   • Schwarz emphasized that transitioning patients from insulin, a cheaper option, to lifelong expensive treatments requires careful consideration of both financial and social impacts.
5. Integration of Evidence-Based Recommendations:
   • IDF guidelines incorporate the latest scientific evidence, focusing on practical, real-world applications tailored to specific countries.

Innovations and Future Directions:

1. Global Diabetes Index:
   • IDF is creating a Global Diabetes Index, collecting feedback from 100,000 physicians and patients annually to compare diabetes care quality across different regions. This will help identify and share best practices.
2. Emphasis on Digital Health:
   • Highlights the potential of Continuous Glucose Monitoring (CGM) and digital tools, including smartphone apps and artificial intelligence, for early diagnosis and personalized interventions.
3. Fasting and Diabetes:
   • IDF is studying various fasting models (including intermittent and religious fasting) to determine their effects on diabetes management, with recommendations expected in 1-2 years.
4. Focus on Prevention:
   • Advocates for early identification of risk factors, particularly liver fat, as a marker for diabetes, and the use of digital tools for preventive measures.

Regional Considerations:

• India’s Role:
  • India was chosen for a pre-launch of the guidelines due to its diverse diabetes population and openness to new approaches.
  • The guidelines incorporate inputs from countries like India to ensure they reflect varied healthcare settings, especially where out-of-pocket expenses are high.
• Ethnic and Demographic Variations:
  • The guidelines acknowledge differences in diabetes presentation globally (e.g., younger onset and lower BMI in Indian patients compared to Western populations).
  • Suggests different diagnostic parameters for obesity based on regional risk factors (e.g., BMI of 23+ considered overweight in South Asians).

Challenges and Outlook:

1. Long-Term Data Needs:
   • Experts, including Dr. V. Mohan, highlighted the lack of long-term safety data for newer drugs like GLP-1 agonists, advocating for established therapies with decades of use and evidence.
2. Quality of Life and Patient Burnout:
   • The IDF aims to prioritize patient well-being and quality of life in future care models, recognizing high rates of diabetes-related burnout.
3. Call for Policy Action:
   • The IDF urges governments and stakeholders to adopt preventive measures and invest in diabetes care, with an emphasis on long-term benefits rather than short-term savings.
4. Potential Game-Changers:
   • Technological advancements like CGM, insulin pumps, AI-driven interventions, and the possibility of islet cell transplantation offer promising future avenues for diabetes management.
5. World Diabetes Day 2024 Message:
   • The focus will be on enhancing patient quality of life, advocating for patient-centered care, and leveraging digital tools for better outcomes.

3. Ransomware attack hit key defence unit last year: DoPT

Sub: Sci

Sec: Awareness in IT and Computers

Context:

• Recently, the 2023-24 annual report of the Department of Personnel Training (DoPT) was published.

Details of the report:

• The report mentions that in 2023, the Central Bureau of Investigation (CBI) investigated several complex cybercrimes with national security implications, including:
  • Ransomware attack on a crucial defence unit.
  • Data breach impacting millions of Indian users.
  • Malware attack in a government ministry.
  • A massive DDOS (Distributed Denial of Service) attack targeting critical infrastructure and airports in India.
• The CBI collaborated with international law enforcement agencies like the FBI, RCMP (Royal Canadian Mounted Police), and Singapore Police to tackle global cyber fraud.
• Crypto frauds have gained prominence, with scams involving large sums of money being unearthed.

Surge in cybercrimes:

• According to the Indian Computer Emergency Response Team (CERT-In), 15,92,917 security incidents were reported in 2023, a significant increase from 53,117 incidents in 2017.
• These incidents included website intrusions, malware propagation, phishing, DDOS attacks, and data breaches.

ICMR Data Leak:

• In October 2023, Resecurity, an American cybersecurity and intelligence agency, issued an alert about a data leak at the Indian Council of Medical Research (ICMR), which exposed sensitive information like Aadhaar and phone numbers of 81 crore Indians addresses.

Key terms:

• Ransomware is malicious software that encrypts a victim’s files, making them inaccessible until the victim pays the attacker a ransom.
• Denial of Service (DoS) refers to a type of cyberattack aimed at disrupting the normal functioning of a computer system, network, or service by overwhelming it with traffic, making it unavailable to legitimate users. The primary goal is to deny access to the service, causing a temporary outage or system crash.
• Malware (short for malicious software) refers to any software intentionally designed to cause damage, disrupt, or gain unauthorized access to computer systems, networks, or devices.
• A website intrusion refers to unauthorized access or attack on a website with the intent to exploit vulnerabilities, steal data, deface the site, or cause disruptions to the website’s functionality.
• Phishing is a type of cyberattack in which attackers attempt to deceive individuals into divulging sensitive personal information, such as login credentials, credit card numbers, or financial details. Phishing is typically executed through fraudulent emails, messages, or websites that impersonate legitimate organizations or individuals.

4. India will fail to meet 2025 TB ‘elimination’ target

Sub: Sci

Sec : Health

Context:

• According to WHO Global TB Report 2024 and the India TB Report 2024, India will not be able to even meet the 2025 milestones set by the WHO End TB Strategy, let alone achieving the ambitious goal of eliminating TB by 2025.
• Even in 2023, India has not met the 2020 milestones of the End TB Strategy for both TB incidence and deaths.

India’s target:

• In 2018, the central government set an ambitious goal for India to eliminate tuberculosis (TB) by 2025, aiming to achieve this five years ahead of the United Nations Sustainable Development Goal (SDG) target of 2030.
• The goal was reiterated by PM Modi in March 2023, during the One World TB Summit in Varanasi.

SDG target for TB:

• The SDG target is a 90% reduction in TB deaths and an 80% reduction in TB incidence by 2030 compared to 2015 levels.
• Also, WHO’s End TB Strategy sets a target of 75% reduction in TB deaths and an 50% reduction in TB incidence by 2025 compared to 2015 levels.

India’s Progress: As per India TB Report 2024

• India did not meet the ‘elimination’ targets set for 2023 by the India’s National Strategic Plan for TB elimination, that is reducing the estimated TB incidence rate per lakh population to 77, and reducing the estimated TB deaths per 1,00,000 population to six.

About Tuberculosis:

• Tuberculosis (TB) is an infectious bacterial disease caused by Mycobacterium tuberculosis.
• TB commonly affects the lungs (pulmonary TB) but can also affect other parts (extrapulmonary TB)
• Tuberculosis spreads from person to person through the air, when people who are infected with TB infection cough, sneeze or otherwise transmit respiratory fluids through the air.

5. World Urban Forum spotlights Africa’s urbanisation & climate challenges

Sub: IR

Sec: Int org

Context:

• The 12th session of the World Urban Forum (WUF12) was held in Cairo recently.
• The theme for WUF12 was ‘It All Starts at Home: Local Actions for Sustainable Cities and Communities’.

Key Takeaways:

• WUF12 focused on urbanisation challenges, particularly in Africa, which is the world’s most rapidly urbanising continent.
• The forum underscored the urgency of addressing sustainable urban development, affordable housing, climate resilience, and inclusive governance in rapidly growing urban centres.
• The event featured six key dialogues: Housing Our Future, Cities and the Climate Crisis, Stronger Together, Financing Localisation and Localising Finance, Putting People First in a Digital Era and The Loss of Home.

Urbanisation in Africa:

• Currently, Africa is the least urbanised continent, but with its population expected to surge from 5 billion to 2.5 billion by 2050, sustainable urban solutions are becoming increasingly urgent.
• Urbanisation rates have risen from 36% in 2010 to a projected 50% by 2030 and 60% by 2050.
• Slum populations are growing across countries struggling to keep pace with urbanisation.
• Climate change is disproportionately affecting African cities and disrupting urban life, particularly for the poor who live in informal settlements like slums.

Africa’s Megacity Boom:

• Africa is home to three current megacities: Cairo, Kinshasa, and Lagos.
• By 2050, seven more cities, including Dar es Salaam, Nairobi, Khartoum, and Johannesburg, are expected to join the megacity list, each with populations exceeding 10 million people.
• These megacities are becoming hubs of economic growth, innovation, and cultural influence, but also face significant challenges in terms of infrastructure, housing, and environmental sustainability.

About World Urban Forum:

• The World Urban Forum (WUF) is the premier global conference on sustainable urbanization.
• It was established in 2001 by the United Nations to examine the impacts of rapid urbanisation on communities, economies and climate change.
• The first session of WUF was held in Nairobi in 2002 and since then, the forum has been held biennially.