[Economists polled by Reuters had expected a headline reading of 5.8 percent,
compared with 5.79 percent in July. The main, or headline, inflation rate
includes food prices, which are often volatile.]
By REUTERS
Food inflation accelerated to a three-year high of 18.18
percent in August, government data released on Monday showed, driving overall
inflation to a higher-than-expected 6.1 percent.
Recent government moves to increase fuel prices also drove
the jump in the wholesale price index, the price of a representative basket of
wholesale goods.
Economists polled by Reuters had expected a headline
reading of 5.8 percent, compared with 5.79 percent in July. The main, or
headline, inflation rate includes food prices, which are often volatile.
Late planting and disruptions in the supplies of vegetables,
including onions, because of heavy summer rains have fueled food inflation.
Onion prices jumped 51 percent from July to August.
Monday’s release was the last major data point before Mr.
Rajan, a former I.M.F. chief economist, holds his first policy meeting Friday.
“Developments in the currency market suggest that R.B.I.
should be in a position to start reversing its tightening measures. However,
they have to be careful, as market could interpret it as tolerating higher
inflation,” said A. Prasanna, an economist with ICICI Securities Primary
Dealership in Mumbai, referring to the central bank, the Reserve Bank of India.
The higher inflation number dampened market expectations
that Mr. Rajan would begin to roll back some of the measures put in place by
his predecessor in a bid to arrest a sharp decline in the rupee since May.
He has already warned he does not have a “magic wand” to
deal with India’s economic crisis, but as he has been dubbed the Guv by a
gushing Indian media, hopes are high he can find a formula to stabilize the
rupee, calm inflationary pressure and at the same time set off a revival in
economic growth.
Before he reveals his monetary stance, Mr. Rajan will first
have to deal with the outcome of a pivotal meeting on Tuesday and Wednesday of
the U.S. Federal Reserve. The Fed is likely to announce measures to rein in its
huge economic stimulus. Fears of an expected policy tapering have already set
off an emerging-market sell-off, contributing to the rupee’s fall to a record
low.
The Fed is expected to reduce its $85 billion a month
bond-buying program, but financial markets are uncertain about the extent of
the reduction.
[So what is the problem if Facebook and others have acquired a halo as they try to reach out to developing nations with false notions about what the poor actually want? After all, they do plan to bring the Internet to places that do not have access. But the tech industry’s misreading of the biggest audience in its own revolution will lure it into committing the same mistake of so many other altruistic projects.]
By Manu Joseph
NEW DELHI — THEY can’t
do without the farmer story. When people who wish to transform India through the
Internet talk about their plans, they tend to tell a story that goes something
like this: A poor farmer is about to sell his crop very cheap when someone,
often a smart adolescent granddaughter, checks the market price online, and the
farmer makes a more informed decision.
It appears that
technology executives feel they must treat the Internet as something deeply
noble and serious in order to substantiate its importance in an impoverished
nation.
Even Facebook, that
great time suck of FarmVille, not farmers, seems to have suffered a head injury
and is now imagining itself as Mother Teresa. Internet.org, the company’s
recent push along with other companies to bring affordable access to the more
than two-thirds of the world that is not yet online, has the grave tone of
social reformation. Facebook’s founder, Mark Zuckerberg, said last month that
the goal was to “create a backbone for many things, including access to
information, access to information about health care, education, jobs and just
so many good things.”
Too many people presume
that what the poor want from the Internet are the crucial necessities of life.
In reality, the enchantment of the Internet is that it’s a lot of fun. And fun,
even in poor countries, is a profound human need. Quality of life is as much an
assortment of happy frivolities as it is the bare essentials of survival. And
India is a perpetual reminder that a lot of good — even the somber sociological
stuff — can come from people setting out in pursuit of joy.
What the poor want from
a technological revolution is probably best understood by watching the way they
react to electricity. They do not crave electricity so they can keep newborns
warm in incubators. They want it for the simple pleasure.
Chibaukhera,
a village in northern India where electricity has been available only since
March of this year, is now under the spell of television. As television sets
were much sought-after and prestigious dowries, several houses had them even
before they got electricity. Now that the TVs and plugs have finally met, the
villagers are hooked on Hindi films and serials about family feuds. In time,
they will have incubators, too.
It is not always true
that entertainment is the collateral consequence of progress; progress, often,
is the collateral benefit of the pursuit of pleasure.
So what is the problem
if Facebook and others have acquired a halo as they try to reach out to
developing nations with false notions about what the poor actually want? After
all, they do plan to bring the Internet to places that do not have access. But
the tech industry’s misreading of the biggest audience in its own revolution
will lure it into committing the same mistake of so many other altruistic
projects.
The last 15 years have
seen numerous well-intentioned missions to transform society through computers
and the Internet — remember One Laptop Per Child? — but few of them have had
much impact.
Today, of the roughly
207 million occupied rural homes in India, only about 1.2 million have
computers with an Internet connection. But there are 300 million cellphone
subscriptions in these areas. And according to a recent survey, more than seven
million of those users connect to the Internet only through their phones.
The extraordinary
triumph of the cellphone among India’s poor stemmed from its ability to enable
a most mundane human need, which is to chat with other people. And when the
poor chat, it is not always about curing a child of diarrhea.
The Indian government
has several valiant plans to bring Internet access to the villages, but they
largely center on connecting government offices for ID databases and for
software simulation to teach citizens skills like plumbing. Wouldn’t it be
better if the poor were offered direct connectivity over their phones, free or
cheap, and were left to decide what they wanted to do with it?
Mr. Zuckerberg’s belief
that connectivity is a human right is honorable. Where he and his allies err is
in imagining that fun is not, and in underestimating the power of entertainment
to transform society. Chatting with friends online may not save the world, but
if it can get more people to log on, the rest will follow.
Many years ago, when I
worked for a lifestyle magazine, I was given my worst assignment ever. I had to
call some of the richest people in southern India and ask them what they
usually had for breakfast. The first man I called told me, “I don’t eat gold
biscuits.” It was a well-deserved reprimand for presuming that rich people were
somehow different from other humans.
It is equally ridiculous
to presume that what poor people want from the Internet is lessons in plumbing.
Manu Joseph is
the editor of OPEN magazine and the author of the novel “The Illicit Happiness
of Other People.”
