Daily Prelims Notes 11 October 2024

Daily Prelims Notes

11 October 2024

Table Of Contents

1. India’s Regulatory Reforms to Accelerate Homecoming of IPO-Bound Startups
2. Why deaths occur due to heat stroke
3. As green patch spreads in Antarctica, here’s what is worrying scientists
4. The Rise of AI-Generated Synthetic Medical Images: New Frontier or Potential Pitfall?
5. OpenSAFELY: A Game-Changer in Health Data Transparency and Privacy

1. India’s Regulatory Reforms to Accelerate Homecoming of IPO-Bound Startups

Sub: Eco

Sec: Capital Market

• Streamlined Reverse Flip Merger Process:
  • Reserve Bank of India (RBI) has scrapped a time-consuming compliance step for foreign-based companies performing a “reverse flip” merger with a domestic subsidiary.
  • The process time has been reduced from 12-18 months to approximately 3-4 months, enhancing efficiency and encouraging startups to list in India.
• Impact on Indian Startups:
  • Dozens of Indian startups previously based abroad for better access to capital and favorable tax conditions are now queuing to return home.
  • Financial hubs such as the United States and Singapore are witnessing a shift as startups prefer India’s listing prospects over maintaining dual listings, which are not permitted in India.
• Notable Startups in Advanced Stages:
  • Razorpay, Pine Labs, and KreditBee are in advanced stages of completing the reverse flip merger.
  • Zepto, Eruditus, and InMobi are also preparing to finish the merger process in the coming months to pursue eventual IPOs.
• Advantages of Listing in India:
  • Experts stated, “India is a home market and a place where everybody knows and understands us. From a listing perspective, it makes sense to be in India.”
  • IPO Prospects: Listing in India offers investors a potentially more lucrative exit avenue and aligns with the strong appetite for tech stocks among Indian public and retail investors.
• Regulatory Support and Compliance:
  • Experts highlighted that the streamlined merger process facilitates swift and efficient scheme approvals without court intervention.
  • Previous Challenges: Before the regulatory change, companies like PhonePe and Groww faced lengthy and costly reverse flip processes, with PhonePe paying $1 billion in capital gains taxes and Groww taking several years to complete the merger.
• IPO Market Growth in India:
  • IPOs by Startups: In the first nine months of this year, IPOs by startups such as Ola Electric and FirstCry have raised $9.17 billion, up from $4.68 billion in the same period last year (LSEG data).
  • This surge positions India as a rare bright spot for equity capital raising in the Asia-Pacific region.
• Government and Regulatory Stance:
  • Commerce Minister Piyush Goyal mentioned that startups shifting back to India will have to pay capital gains taxes, emphasizing that the motive is financial gain through higher valuations in India.
  • Regulatory Preference: India’s central bank and other regulators prefer local firms over foreign counterparts for key operational licenses, enhancing the attractiveness of staying within India’s regulatory framework.
• Future Outlook and Opportunities:
  • Experts also noted that the regulatory changes will encourage even more companies to undertake reverse flips, further boosting the IPO ecosystem in India.
  • Investment Opportunities: With easier access to the IPO market, startups can leverage India’s growing economic landscape to achieve better growth and valuation outcomes.

Reverse Flipping

Reverse Flipping refers to overseas start-ups relocating their domicile to India and opting to list on Indian stock exchanges. This trend is driven by various economic, market, and policy-based incentives.

• Key aspects:
  • Higher Valuation Potential: Start-ups perceive India’s large and growing economy as offering opportunities for higher exit valuations.
  • Access to Venture Capital: India has deeper pools of venture capital, helping businesses secure the funding needed for expansion.
  • Favorable Tax Regimes: Policies provide tax benefits that make it lucrative for companies to establish their base in India.
  • Improved Intellectual Property Protection: India now offers better protection for intellectual property rights, making it safer to innovate.
  • Young and Educated Population: India’s demographic advantage adds to the country’s attractiveness for entrepreneurship.
  • Government Policies: Initiatives like Start-Up India and Make in India provide favorable support systems for foreign start-ups.

Govt. recognized reverse flipping as a growing trend and recommended measures to accelerate the process.

• Proposed Simplifications:
  • Tax vacations.
  • Reforms in Employee Stock Option Plan (ESOP) taxation.
  • Easing capital movement.
  • Reducing tax layers to facilitate easier operations.

What is Flipping?

Flipping refers to an Indian company transforming into a 100% subsidiary of a foreign entity. This involves the relocation of headquarters overseas along with the transfer of intellectual property (IP) and assets. In this process, the Indian start-up effectively becomes owned by the foreign entity, and the founders retain ownership by swapping shares.

• Impact of Flipping on India:
  • Brain Drain: The relocation leads to the loss of entrepreneurial talent from India.
  • Loss of Value Creation: Flipping results in value being created in foreign jurisdictions instead of benefiting the Indian economy.
  • Intellectual Property and Tax Revenue Loss: India loses valuable intellectual property rights and potential tax revenues when companies move overseas.

2. Why deaths occur due to heat stroke

Sub : Sci

Sec: Health

Context:

• The recent airshow in Chennai, resulting in five fatalities and numerous cases of heat-related illnesses highlighted the dangers of prolonged heat exposure.

What is a heat stroke:

• Heat stroke, also known as sun-stroke is a condition caused by excess heat in the body.
• This usually happens because of exposure to high temperatures or physical activity in high temperatures for too long.
• Heat stroke occurs when your body gets overheated (body temperature of 40°C or above) and cannot cool itself down.
• Symptoms: severe headache, dizziness, nausea and confusion. In some cases, it can cause seizures, or coma and can be fatal.

Factors influencing heat retention:

• According to the World Health Organisation, the amount of heat stored in the body is determined by a combination of two factors:
  1. an inability to eliminate internally generated heat from metabolic processes due to environmental health stress (such as high temperature, high humidity)
  2. clothing creating a barrier to heat loss and external heat gain from the environment.
• When the body can’t control its temperature and get rid of extra heat, it raises the chances of heat stroke.

How does heat impact health:

• Normal metabolic activity occurs at 38 to 39 degrees Celsius, and overheating can trigger dizziness and excessive sweating.
• Excessive sweating can lead to dehydration, thickening the blood and complicating circulation.
• This may result in decreased blood pressure and oxygen saturation levels, heightening the risk of serious health issues.

Effects of dehydration:

• Dehydration can increase sodium concentration, leading to hypernatremia, which may cause brain haemorrhages.
• Potential impacts on metabolism, affecting sodium, potassium, and fluid balance, leading to encephalopathy.

Vulnerable Population:

• Elderly people are particularly susceptible to heat stroke due to thinner skin and a higher likelihood of dehydration.
• Pre-existing health conditions can exacerbate the effects of heat exposure.

3. As green patch spreads in Antarctica, here’s what is worrying scientists

Sub: Env

Sec: Climate change

Context:

• Plant cover on the Antarctic Peninsula, a mountainous extension of Antarctica, has increased more than 10 times in recent decades due to rising temperatures.
• The study, Sustained greening of the Antarctic Peninsula observed from satellites, published in Nature Geoscience, shows a dramatic transformation.

How Fast is Antarctica Warming?

• Warming Rate:
  • Antarctica is warming twice as fast as the global average (0.22-0.32°C per decade).
  • The Antarctic Peninsula is warming five times faster than the global average.
  • Since 1950, the Antarctic Peninsula has warmed by almost 3°C.
• Record Heat:
  • The continent has experienced record-breaking heatwaves, particularly during its winter (northern hemisphere summer).
  • In July 2024, ground temperatures were 10°C higher than normal and up to 28°C higher on certain days.
  • In March 2022, East Antarctica experienced an extreme heatwave with temperatures 39°C above normal.

Key Findings of the Study

• Vegetation Growth:
  • Satellite data shows a 14-fold increase in vegetation on the Antarctic Peninsula between 1986 and 2021.
  • Plant cover (mainly mosses and lichens) expanded from less than 1 sq km to almost 12 sq km in 35 years.
  • The rate of greening has accelerated by more than 30% between 2016 and 2021.
  • Researchers attribute this rapid transformation to anthropogenic climate change.
• Sea Ice Reduction:
  • The extent of sea ice is rapidly decreasing. In 2024, it was the second smallest on record, only slightly higher than the record low in 2023.
  • Warmer open seas are likely creating wetter conditions that support plant growth.

Concerns About Increased Vegetation in Antarctica:

• Invasive Species Risk:
  • Mosses can create soils, making the continent more vulnerable to invasive species, which could threaten native flora and fauna.
  • Human visitors (eco-tourists, scientists) could unintentionally introduce non-native species.
• Impact on Sunlight Reflection:
  • Increased plant cover could reduce Antarctica’s ability to reflect sunlight (albedo effect), leading to more heat absorption and further warming.
• Ice Loss and Sea Level Rise:
  • Antarctica has lost 280% more ice in the 2000s and 2010s compared to the 1980s and 1990s.
  • Rising temperatures will accelerate ice loss, contributing to global sea level rise.
• Future Outlook:
  • As greenhouse gases continue to accumulate in the atmosphere, warming will persist, and vegetation in Antarctica is expected to increase further.

Source: IE

4. The Rise of AI-Generated Synthetic Medical Images: New Frontier or Potential Pitfall?

Sub: Sci

Sec: Health

Why in News

The growing use of synthetic medical images, generated by artificial intelligence (AI), has sparked significant interest in healthcare and research. These images offer a scalable, cost-effective solution to the challenge of acquiring high-quality medical images while maintaining patient privacy. However, concerns are emerging about the ethical implications and potential risks associated with this technology, making it a key topic in the ongoing AI revolution in healthcare.

What are Synthetic Medical Images?

Synthetic medical images are AI-generated visuals created without traditional imaging methods like MRI, CT scans, or X-rays. AI techniques such as Generative Adversarial Networks (GANs), diffusion models, and autoencoders are employed to construct these images from scratch, using mathematical models instead of real-world patient data.

These images serve as alternatives to real medical images, addressing the growing demand for annotated medical data in research and diagnostics.

How Synthetic Medical Images are Created:

Variational Autoencoders (VAEs): Compress real images into simpler forms and recreate them, improving image quality over time.

Generative Adversarial Networks (GANs): A generator creates synthetic images, while a discriminator distinguishes between real and fake images, leading to continuous improvement through competition.

Diffusion Models: Create realistic images using a step-by-step refinement process.

Advantages of Synthetic Medical Images:

Transforms data from one modality to another, such as creating synthetic CT scans from MRI data, filling gaps when certain types of scans are unavailable.

Privacy Protection: Since synthetic images do not rely on actual patient data, they help avoid privacy concerns, allowing easier sharing and collaboration across research teams without risking patient confidentiality.

Cost and Time Efficiency: Synthetic images reduce the time and expense of collecting real medical data, making research more efficient.

Challenges and Ethical Concerns:

Deepfakes in Healthcare: There is a risk that synthetic images could be manipulated to create fake clinical findings or submit fraudulent claims to insurers, posing financial and ethical risks.

Simplified Representations: Synthetic images may fail to capture subtle yet crucial variations found in real medical data, such as tissue density differences in MRI scans, reducing the diagnostic accuracy of AI models trained on synthetic data.

Overreliance on Synthetic Data: If AI systems rely predominantly on synthetic images, there is a risk of creating diagnostic models that are disconnected from real-world medical complexities, potentially leading to inaccurate diagnoses.

What is Generative Artificial Intelligence?

GAI is a rapidly growing branch of AI that focuses on generating new content (such as images, audio, text, etc.) based on patterns and rules learned from data.

The rise of GAI can be attributed to the development of advanced generative models, such as Generative Adversarial Networks (GANs) and Variational Autoencoders (VAEs).

These models are trained on large amounts of data and are able to generate new outputs that are similar to the training data. For example, a GAN trained on images of faces can generate new, synthetic images of faces that look realistic.

While GAI is often associated with ChatGPT and deep fakes, the technology was initially used to automate the repetitive processes used in digital image correction and digital audio correction.

Arguably, because machine learning and deep learning are inherently focused on generative processes, they can be considered types of GAI, too.

5. OpenSAFELY: A Game-Changer in Health Data Transparency and Privacy

Sub: Sci

Sec: Health

Why in News

The OpenSAFELY platform, developed by Ben Goldacre and his team at the University of Oxford, has revolutionized access to health data in the U.K. by ensuring privacy while offering a transparent system for researchers. This system is particularly significant for studying COVID-19-related data and other health conditions, creating a balance between public health research and patient privacy.

About OpenSAFELY:

OpenSAFELY is a secure, transparent, open-source software platform for analysis of electronic health records data. All platform activity is publicly logged. All code for data management and analysis is shared, under open licenses and by default, for scientific review and efficient re-use.

OpenSAFELY is a set of best practices encoded as software. It can be deployed to create a Trusted Research Environment (TRE) alongside appropriate database, compute, governance, and administrative elements; or it can be deployed as a privacy-enhancing layer on any existing secure database or TRE.

OpenSAFELY provides access to health records of 58 million U.K. citizens without compromising individual privacy.

Researchers do not directly access raw health data. Instead, they use dummy datasets to test queries before being sent to secure systems for retrieval of necessary data, preventing unauthorized access.

How Does OpenSAFELY Ensure Transparency?

Open Code Sharing: Every line of code used by researchers is immediately made publicly available, ensuring transparency in research methodology.

Prevention of p-hacking: The platform eliminates the risk of manipulating data to achieve desired results. This transparency avoids the issue of different analysts producing varying results from the same dataset.

About National Health Service (NHS):

The NHS was established in 1948 as a publicly funded healthcare system in the U.K., providing healthcare free at the point of delivery. It offers comprehensive healthcare services to all U.K. residents, funded primarily through taxation.

Every British citizen has a single health record maintained by the NHS, containing lifelong health information from birth to death. Since 1996, 96% of NHS general practices have maintained electronic health records, aiding in healthcare efficiency and research.

NHS health data is used for research and analysis, with platforms like OpenSAFELY ensuring privacy and transparency.

About Indian National Digital Health Mission (NDHM):

Under National Digital Health Mission, every Indian will get a Health ID card that will store all medical details of the person including prescriptions, treatment, diagnostic reports and discharge summaries.

The citizens will be able to give their doctors and health providers one-time access to this data during visits to the hospital for consultation. However, access to the confidential medical data will have to be given separately for each visit due to fears over data confidentiality.

The National Digital Health Mission will allow patients to access health services remotely through tele-consultation and e-pharmacies, as well as offer other health-related benefits

It comes under the Ayushman Bharat Pradhan Mantri Jan ArogyaYojana (AB PM-JAY) and implemented by National Health Authority.

The National Health Policy 2017 had envisaged creation of a digital health technology eco-system aiming at developing an integrated health information system that serves the needs of all stakeholders and improves efficiency, transparency and citizens’ experience with linkage across public and private healthcare.

In the context of this, central government’s think-tank NitiAayog, in June 2018, floated a consultation of a digital backbone for India’s health system — National Health Stack.