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India: Spike in inflation shatters hopes of rate cut

PM's fuel price hike boosted inflation to 10-month high of 7.8 percent in August, killing industry's hopes for a rate cut.
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Members of the Communist Party of India, Marxists(CPI-M) burn an effigy of United Progressive Alliance (UPA) government during a protest against petrol price rises in Hyderabad on September 16, 2011. Rising oil costs have contributed to a spike in inflation that is becoming a major headache for India as the rupee plunges against the dollar. (NOAH SEELAM/AFP/Getty Images)

The prime minister's moves to hike prices for petrol and diesel fuel, thus reducing the government's subsidy bill and moving closer to balancing the budget, resulted in a spike in inflation that has put paid to industry's hopes for an interest rate cut.

Inflation rose to a 10-month high 7.8 percent in August, thanks mainly to the fuel price hike, Reuters reported Monday.


India: Can India Inc make interest payments on its dollar debt?

Suzlon Energy's trouble making payments on $200 million debt raises concerns about the heath of India's debt-laden firms

Wind turbine maker Suzlon Energy's announcement that it may not be able to repay foreign currency bonds worth some $200 million has again raised questions about the financial health of debt-laden Indian companies, following the dramatic depreciation of the rupee this year.


India: Can you really teach entrepreneurs?

There's growing skepticism about the developing world's "reluctant entrepreneurs," who start businesses only because they can't find a job, writes the Economist

My article on the Be! Fund this week showcased how the non-profit is applying the principles of venture capital to create entrepreneurs in India's poorest communities -- and building businesses that employ people and address social or environmental problems.  But can these entrepreneurs really bring about large scale change?


India: "Mindless negativity" on hunger, malnutrition, and child marriage

India is world's child marriage capital, accounts for most of the world's hungry, and fails spectacularly at curbing malnutrition.

Indian Prime Minister Manmohan Singh lashed out against "mindless negativity" on Wednesday, in a thinly veiled response to the flurry of corruption allegations leveled against a businessman who married into the Gandhi family. But it would be worse than mindless to take a rosy view of the situation--despite India's improved economic growth over the past 20 years.


India: Clinical trials exploit India's poor

Incidents of abuse highlight flaws in India's regulation of clinical trials

Thanks to its huge, ethnically diverse population, India has become a global hub for clinical trials since it introduced patent protection laws in 2005, lowering research and development costs by nearly two-thirds in phase one phase three trials. But the business has been plagued by regulatory failures, reports India's Mint newspaper.


Obama's 'bromance' with Pakistan hits India

A college friendship with Pakistani hippies suggests the US president is cooler than we thought, at least according to a new play.
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The US government aired ads on Pakistani TV this week denouncing the anti-Islam film. (LiveLeak/Screengrab)

US President Barack Obama has done more to shift America's allegiance away from Pakistan toward India than any of his predecessors. But according to a new play by Rashid Razaq, Potus had a bromance with a Pakistani classmate who merits only a few pages in Obama's "Dreams of My Father."


India: Can mobile phones take the place of banks?

Leveraging mobile phones, India's FINO has built a customer base of 50 million paan wallahs, rickshaw pullers and vegetable vendors

Getting poor people into the banking system -- which will allow them not only to save money, but also borrow funds to increase their earning power -- has been one of India's biggest challenges. But as a new article from Forbes India points out, an outfit called FINO, which was started by ICICI Bank in 2006, has been quietly making serious progress.

When I wrote about mobile banking for Newsweek back in 2007, it was little more than a good idea, though a host of firms were already setting up "banking correspondents" in India's towns and villages. But since then, FINO has flown under the radar to make some pretty big strides, writes Forbes.

The quintessential "branchless bank," FINO uses so-called ‘pod machines’, hand-held biometric devices that recorded customer fingerprints, and local agents to keep serve its customers, says Forbes. The biometric readers reduce the risk of fraud, and its machines function both online and offline, so money still got transferred in areas without any network.

This is one instance where technology seems to be living up to the hype.

"By January 2010, it had 10 million customers (across 15 banks). It added another 15 million in the next year and doubled the base to 50 million by August 2012, two-thirds of the clientele base in the sector," the magazine reports. What's more? Having posted its first profits in 2011, "It’s eyeing 100 million by 2015," Forbes says.


India: Poor choose cash transfers over food subsidy

Experts go back and forth about whether cash is better than food, but the poor people themselves vote for cash.
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A mother tends to her child in Dharavi slum in Mumbai on January 20, 2009. (SAJJAD HUSSAIN/AFP/Getty Images)

Over the past year or so, Indian experts have been wrangling over whether or not to scrap the so-called “public distribution system” that provides food to the poor at subsidized rates in favor of giving them cash to spend as they will.

Cash would help eliminate some corruption, advocates say, arguing that with cash in hand the poor won't be at the mercy of the owners of “ration shops,” who frequently short-change them and sell the subsidized grain in the ordinary market.


India: Toilets versus temples

India's rural development minister draws the ire of religious groups with the self-evident claim that the country needs toilets more than temples.
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An Indian man (L) washes as another comes out of a toilet in a toilet complex run by an NGO Sulabh International at railway station in New Delhi on April 23, 2011. (PRAKASH SINGH/AFP/Getty Images)

Religious folks to say God is everywhere, which they mostly seem to believe is a good thing. Only half of that is true of excrement here in India.

So why has a self-evident statement by the rural development minister that India needs toilets more than it does temples raised the hackles of some religious groups here?  No reason, I suspect, except the political party he represents.


India: Singh opens insurance, pension sectors to foreign investment

Second wave of economic reforms was expected after government weathered the pullout of Mamata Banerjee's Trinamool Congress.
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Indian Prime Minister Manmohan Singh, also President of the Council of Scientific and Industrial Research (CSIR), attends the CSIR conference in New Delhi on September 26, 2012. (RAVEENDRAN/AFP/Getty Images)

Prime Minister Manmohan Singh unveiled the second wave of economic reforms in as many months on Thursday, opening the insurance and pension sectors to foreign investment.

The moves have been expected since Singh's United Progressive Alliance (UPA) government weathered the pullout of Mamata Banerjee's Trinamool Congress following last month's decision to hike diesel prices and open the retail sector to investments from companies like Walmart.