The relationship between the VIX Index and economic stability is indirect but significant, as the VIX primarily reflects market volatility and investor sentiment rather than underlying economic conditions. However, there are several ways in which the VIX can provide insights into economic stability. 

• High levels of volatility, as indicated by a rising VIX, can reflect uncertainty and a lack of confidence in the economy and financial markets. Sharp increases in the VIX may coincide with periods of economic instability, such as recessions or financial crises, as investors react to negative economic indicators or geopolitical events.
• Elevated levels of volatility can indicate stress in financial markets, which may spill over into the broader economy. A persistently high VIX may signal systemic risks and potential disruptions to economic activity, as investors become more risk-averse and market liquidity dries up.
• Changes in the VIX can influence investor risk appetite and investment behaviour, which in turn can affect economic stability. High volatility may lead to reduced investment and capital expenditure by businesses, impacting economic growth. Similarly, volatile markets can discourage consumer spending and confidence, affecting overall economic activity.
• Central banks and policymakers may monitor the VIX as part of their assessment of economic stability and financial market conditions. Sharp increases in volatility may prompt central banks to intervene with monetary policy measures to stabilize markets and support economic growth.
• Volatility spikes in one market or asset class can trigger contagion effects, spreading to other markets and causing broader economic disruptions. For example, a sharp increase in equity market volatility may lead to sell-offs in other asset classes, such as bonds or commodities, affecting investor sentiment and economic stability.

Foreign Portfolio Investors (FPIs), also known as Foreign Institutional Investors (FIIs) in some countries, are entities such as mutual funds, pension funds, hedge funds, insurance companies, and sovereign wealth funds that invest in the financial markets of a country other than their own. FPIs typically invest in a diversified portfolio of financial assets, including stocks, bonds, money market instruments, and other securities.

The key characteristics of foreign portfolio investors

• FPIs encompass a wide range of institutional investors from foreign countries. They may include both public and private sector entities, as well as individuals investing through pooled investment vehicles like mutual funds.
• FPIs invest in financial markets to earn returns on their investments. They may have different investment strategies and mandates, ranging from long-term value investing to short-term trading.
• FPIs often maintain diversified portfolios across different asset classes, sectors, and geographic regions to manage risk and enhance returns. They may allocate their investments based on factors such as market conditions, economic outlook, and risk appetite.
• FPIs can have a significant impact on the financial markets of the countries in which they invest. Their buying and selling activities can affect asset prices, market liquidity, and investor sentiment.
• Most countries have specific regulations and guidelines governing the participation of FPIs in their financial markets. These regulations often include registration requirements, investment limits, disclosure obligations, and restrictions on certain sectors or industries.
• FPIs play a vital role in global capital markets by providing liquidity, diversification opportunities, and capital allocation efficiency. They contribute to the development and integration of financial markets and facilitate cross-border investment flows.

TUBERCULOSIS

1. Context

2. About Tuberculosis

• Tuberculosis (TB) is an infectious disease caused by Mycobacterium tuberculosis.
• It commonly affects the lungs, but can also affect other parts of the body.
• It is a treatable and curable disease.
• TB is spread from person to person through the air. When people with lung TB cough, sneeze, or spit, they propel the TB germs into the air.
• Common symptoms of active lung TB are cough with sputum and blood at times, chest pains, weakness weight loss, fever, and night sweats.
• Bacille Calmette-Guerin (BCG) is a vaccine for TB disease.

3. How many TB cases are detected each year?

• Although India continues to be the largest contributor to global TB cases, there has been a decline in the number of cases in 2021.
• Reporting of TB cases also improved in 2021 although it didn’t reach the pre-pandemic levels, it bounced back from the lows seen during the first year of the pandemic, according to the Global TB Report 2022.
• The incidence of TB new cases detected throughout the year was reduced by 18% in 2021 over the 2015 baseline, dropping to 210 cases per lakh population as compared to 256 cases per lakh population.
•  The incidence of drug-resistant TB also went down by 20% during the period from 1.49 lakh cases in 2015 to 1.19 lakh cases in 2021.
  India accounts for 28% of all TB cases in the world, according to the Global TB Report 2022. 

4. What is India’s elimination target?

• Although the elimination of Tuberculosis is one of the sustainable development targets to be achieved by 2030 by the world, India has set a target of 2025.
• The national strategic plan 2017-2025 sets the target of India reporting no more than 44 new TB cases or 65 total cases per lakh population by 2025.
• The estimated TB incidence for the year 2021 stood at 210 per lakh population. 
• Achieving this target is a big task as the plan had envisaged an incidence of only 77 cases per lakh population by 2023.
• The programme also aims to reduce the mortality to 3 deaths per lakh population by 2025. The estimated TB mortality for the year 2020 stood at 37 per lakh population.
• The plan also aims to reduce catastrophic costs for the affected family to zero.
• However, the report states that 7 to 32 percent of those with drug-sensitive TB, and 68 percent with drug-resistant TB experienced catastrophic costs.
• The goals are in line with the World Health Organisation’s End TB strategy which calls for an 80% reduction in the number of new cases, a 90% reduction in mortality, and zero catastrophic cost by 2030.

5. What is being done to try to achieve this target?

• To achieve the TB elimination target of 2025, the government has taken several steps including looking for cases actively among vulnerable and co-morbid populations, screening for it at health and wellness centers, and calling on the private sector to notify all TB cases.
• An online Ni-kshay portal has been set up to track the notified TB cases.
• The pandemic has led to improved access to more accurate molecular diagnostic tests like CB-NAAT and TureNat which were also used to test for Covid-19.
• At present, there are 4,760 molecular diagnostic machines available, covering all districts of the country.
• In addition, 79 line probe assay laboratories and 96 liquid culture testing laboratories have been set up for the diagnosis of multi and extremely drug-resistant TB.
• The government has also implemented a universal drug susceptibility test, meaning that antibiotic susceptibility of the mycobacterium is determined for all newly diagnosed cases.
• Earlier, the patients were started on first-line treatment and were tested for drug resistance only if the therapy did not work. Conducting a drug susceptibility test at the outset ensures that the patients are given antibiotics that will work for them from the get-go.
• Last year, the government also launched a community engagement program where Ni-kshay Mitras can adopt TB patients and provide them with monthly nutritional support. So far 71,460 Ni-kshay Mitras have adopted about 10 lakh TB patients under the programme.

6. Improvements in Treatments Protocols

• Newer drugs such as Bedaquiline and Delamanid for the treatment of drug-resistant TB have been included in the government’s basket of drugs provided for free to TB patients.
• These oral drugs can replace the injectable kanamycin that was associated with serious side effects like kidney problems and deafness.
• These new drugs have also been included in the new National List of Essential Medicines that gives the government power to regulate their market price as well.
• Researchers have also been studying shorter three- and four-month courses of antitubercular drugs, instead of the existing six-month therapy.
• Anti-tubercular drugs have to be taken for six months to over two years depending on the susceptibility of the mycobacterium.
• Long duration of treatment results in people dropping out in between, increasing their likelihood of them developing drug-resistant infections later.

7. Newer Vaccines in the Pipeline

• Nearly 100 years after the existing BCG vaccine was developed, researchers are on the lookout for newer ways of preventing tuberculosis infection.
• The BCG vaccine uses a weakened form of TB bacteria to train the immune system.
  Although it can protect against severe forms of TB like the ones in the brain, the protection is not very good against the most common form of TB in the lungs.
• It offers limited protection to adults, it doesn’t prevent people from getting the infection or re-activation of a latent infection.
• Trails are underway to test the effectiveness of a vaccine called Immuvac, which was initially developed to prevent leprosy, preventing TB.
• The vaccine developed using mycobacterium indicus pranii has antigens the portions of a pathogen against which antibodies are developed similar to those of leprosy and TB bacteria.
• Researchers are also testing the vaccine candidate called VPM1002, which is a recombinant form of the BCG vaccine modified to express the TB antigens better.
• This results in better training of the immune system and protection against TB.
  Researchers are also studying whether the existing BCG vaccine booster shot should be given to household contacts of a person with active tuberculosis.

Previous year Question

For Prelims & Mains