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Buying power of US Dollar vs. Rupee. Price of Food, Clothes, Inflation

When I call my parents in India, my Mom asks about prices of vegetables, clothes and other stuff in US. I tell the price in dollars…when I complain about prices of few things in America, she replies saying, “for you guys living in America, one dollar is equal to one rupee…so it is ok…” I right away reply to my mom, “A dollar is never equal to rupee…the buying power of one Dollar is much higher than a rupee in India.” I quote an example saying, “in America, people can get a cheap cheese burger for a dollar or even cheaper taco in taco bell for 80 cents or so…but, what can you buy for a rupee in India…Nothing ! ”. In general, it is not logical to compare both currencies as their value is different, but just trying to explain the perceptions of people about currency. This article is part of the series Settle in US or  India and will focus on inflation, cost of various things and how things are changing in America vs. India.

Inflation of USA vs India, Economy growth rate.

If you look at both of these graphs, you get a clear idea of the inflation rates based on consumer price index. In India, the inflation rate is over 10% or hovering around there…whereas in America, the inflation is under 2% and there was deflation in USA during recession.  United States Inflation rate History Inflation in India Historical Data Logically, what is happening is, due to inflation in India prices are going up crazy and the effective buying power of a rupee is decreasing.  People who work in IT companies in India, get Salary hikes ranging from 15% to 30% every year, where as in America the average hike per year in salary is around 3%. The logical reason for the disparity in the hike is the inflation. Also,  Indian economy is a growth phase and we can expect to have the inflation for the new decade or so…who knows…

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You can get good branded clothes in US for relatively less price, depending on sale or time of season….I took out few friends, who came from India few weeks ago, to shopping malls and outlet malls to buy clothes and shoes…they were surprised by the price of clothes and shoes in America….they said US prices were relatively cheap for the good brands they were buying….to add more, food is relatively cheap in America when compared to price of the food with India…Just a note, I am talking about the upper middle class people in India who have an IT job or a well paying job leading a lifestyle of spending money in Malls, multiplexes, etc…

Decision to Live in India vs. USA based on  Inflation

On a macro level, based on the inflation data presented above and the continuing growth rate of Indian economy, it is a good idea to stay in America for next decade or so until the Indian economy stabilizes….the sole point of staying in US is based on stable economy and less inflation… If you stay in India and save money, unless you get over 10% interest rate on your savings, your savings money is not enough to meet inflation and it is worth nothing.…Also, you would have to pay lot more money for house interest rates and other stuff…there are so many things, I am just talking on a very high level…

What do you think about Inflation India vs. America ?

Image Credit : http://www.springercreative.com/uploads/preview/Inflation.gif

Data presentation credit : http://www.tradingeconomics.com/Economics/Inflation-CPI.aspx?Symbol=USD


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  1. Excellent article and well explained when it comes to the buying power of the 2 currencies.

    I am in the USA and I have friends who visit India and you definitely get a lot more for your money when paying with U.S.A. currency.

    They love visiting India the culture, the food, etc…

    India is an up and coming superpower in the next 10 years and there economy is expected to be #3 in the World by then.

    Anyways, I enjoyed reading your post very informative.


  2. I need a help
    I got a job in US where they will give me 5000$ per month with room facility also i will lead ordinary life and i will be with my friend as a roommate
    Is it possible to save 4000$ dollars per month so that if i send that 4000$(270315.80 Indian Rupee) it will be great for my family to lead a luxury life in India
    I need help about this can anyone explain this to me

    • Sachin,

      Not sure where you will be working in US, but your take home salary will be 5K-taxes, which are pretty high.

      At the face of it, I don’t think you will be able to save 4K every month.

    • If you’re living in California, no, on $5000/month you will probably be able to send them maybe $1500/month. Remember the government will be taking atLEAST $1000/mo taxes out of that, so you will be getting no more than $4000 to begin with. Plus then rent, food, transportation at minimum.

    • I don’t see how you can live on $1,000 a month. Depending on where you live, rent can be upwards of $700 plus add utilities of at least $100 then food for a good $100+ a month.
      If you go New York or California it’s going to be much worse!
      Here in central Illinois a building at the end of our block has 4 nice apartments. They rent for $770 a month. We have 3,000 sq feet or less and our utilities in summer are $200/month and gas is that much in winter. Not withstanding food.
      I’m coming to India in January and am wondering about the prices there for good. We have a tour so all that is upfront. It’s some meals and souvenirs I’m concerned about price wise.

      • Hi Linda, I am looking out for a Job in Us,

        Mentioned below is my email I.D. roshan10.rc@gmail.com for your kind perusal,

        Hoping to get a revert from your end which will help in giving my a carrier a lift,



  3. Although the title of the article suggested that it will be helpful to understand the real value of money in US and India and whether its good to continue to live in India or in US specially towards the end of your career or post career; but unfortunately the article was misleading and vague. However some of the comments down below are to some extent thought provoking and correct. The question still remains if its good to go back to India and start living there? Or it is better to stay in US as long as possible (if possible for ever) and become a part of it. I have a feeling if you can not earn much (dont know what would be a good value but somewhat upwards of 8000 USD/mon or more, you might be saving to little to survive in US once you dont have a job either due to retirement or due to loss of job. Unless you are able to stay a long period of time I would say more than 10 years when that happens, and your social security kicks in or will kick in in future…if you have not made a good after job financial situation, India is your best bet. Specially when you are getting old and medical becomes an important part of your and your families life, without a good saving US can fast become a hell in heaven. Means you will live in a hell but rest of the people who are eaither earning or have good saving will continue to live in a nice living condition…you can live in hell in US and your own neighbors can live very peacefully…so whether you should move back to India will depend on your financial condition…if you are average India is your place…if you are above US is where you should be…is not that the reason you left India trying to be above average? Your task does not complete till you achieve that…before you achieve that you can consider moving back at any point of time. And the rest is pretty straight forward again…depending on you savings in INR you will either live peacefully or painfully. In India service is still cheap, throw money and you get maids to do your shit work…throw money and you get somebody else to do your work…as long as you can keep on throwing money here and there you should be fine…the medical is still cheaper (much cheaper) in India with decent to great doctors…house is cheaper more or less…so thats it. Hope US to INR conversion keep on falling before you decide to move back…and you know the real money value inside the country will not be what the exchange rate suggests…there comes the purchasing parity…you will continue to get things probably at a much lower exchange rate when you are inside the country…so yo can reap the fruit.

  4. I hope this thread is still been followed but couldn’t stopped myself posting. Not sure if some of you guys would like my post or not. But the reality is, NRIs and Indian government too are mostly responsible for the hike in inflation rate and the increased prices in India. Just try to think about it, when did Flat prices start growing in India? Had they been same since the beginning? No!! I remember, till 2007, common man was able to buy the flats in Pune in decent areas. Please note I am not talking about only IT people or high income group. But that picture got changed once IT started growing in India. If you go back in time when Indian market was opened for foreign companies, I am not sure but think INR value was is better shape compare to USD. But afterwards, Oil and gas Transactions started happening in USD currency (doesn’t know exactly when this started but it impacted on other currencies badly) which forced India to buy USD currency and USD value started growing. It got worse when IT hit India. Lots of Indians got chance to go abroad and earn in USD. Each individual started investing in Real estate in India. The very basic rule of demand and supply played its role , Flat prices started growing in India drastically. I understand everybody think to buy their own house and its basic need. But most of the NRIs have more than two houses/ real estate in India. These things don’t happen in US. Their mentality is not like that. Their earning power is not that much to support more that one house. Hardly anybody gets more than $200K a year. Cost of living, medical insurance, other insurances are very high so very less people could think real estate as an investment option or could save money for second home. They get the things in cheap prices as most of the things are imported from other countries which have low currency values. Most of the people stay in rented housed/flats for their entire life.
    I just want to say comparing tow economies should not be treated as an apple to apple comparison.
    It’s true that life is better in US than in India but it’s all because people are educated and wants to keep their lives very simple. No place is good or bad, it’s the people who have to learn be happy, be satisfied before to be rich.

    • Excellent Sandip!
      I have been living in USA last from 3 years and I totally agree with the statement that No place is good or bad, it’s the people who have to learn be happy, be satisfied before to be rich.

  5. I think the author needs an intravenous injection of common sense arithmetic and has to learn what is the meaning of Purchasing Power parity. The mother may be excused. Perhaps she is just repeating what others have told her!

    Assuming USD 1 = INR 61 simple common sense warrants that one should compare what one can buy in USA with I USD


    what can be purchased in INDIA with INR 61

    A “Cheese burgher” in a Mobile Stand costs 1 USD

    The same “Cheese burgher” in a comparative pavement shop in Chennai may be just INR 20.

    In other words india is 3 times cheaper than USA. This is what is called PPP or Purchasing Power Parity.

    PPP factor between USA and India is 42% meaning only 42% of a defined list of essentials can be bought with 1 USD in USA as against the same defined list of essentials purchased for INR 61 in India.

    Better to ignore the rest of the graph and pseudo economics!

    • MK,
      The article is NOT about Purchase power parity, but about the common perception of buying power and inflation in growing economies. Nobody needs injections, learn some etiquette when contributing in community blogs…

      • india is cheaper because many things ,which are produced by the farmers, are cheap, because indian farmers are not organized and cold stores facilities are not available,so living cost is cheaper than other countries.

  6. Dear one,
    I think your mom is right, but to come that conclusion you need to see some rain.
    Well nicely written but wrongly interpreted. Just like the story of frog and scientist.

  7. I like the interpretation but I would surely think it is written by some one who has been living in US and sees life in India through vacation. To be fair I have been on the same boat. I lived in US for 6 yrs and have been back in India since a year. Yes 1 rupee is not equal to 1 dollar in buying power but if you are comparing the $1 burger and 80 cents taco your equivalent economy food is street food in India and if you convert the price point of the food on these places you will find a plate available to you for 30 to 100 INR depending on which city you are in or rather which part of city you are in as well. Another way of looking at it is 60 INR buy same thing as 1 USD which is the conversion rate. So if we look at that we will find India to be rather cheap except for US or international brands which you are paying a heavy import duty. Locally made brands are rather cheaper for better cloth quality ask anyone who understand cloths in term of quality will tell you the same. A Louise Philipe is much better shirt than many of Banana republic shirt for much lesser price and I am not even going to Gucci, GAP , Guess to the quality and price discussion. Yes designs is a different question in which I do believe India has a lot of catch up on . This discussion is still not fair because no Indian gets his equivalent salary in rather only 20% to 35% of equivalent salary ($ salary multiplied by 60). I was fighting to balance my income to my habits after coming back from US. One has a tendency to convert every thing you find here in equal USD and see how expensive it is and as your incoming is not remotely like US you find yourself in trouble if you let this blind you. The best way to approach so far is to use what I call pinch factor. Take absolute of price of any product in India by 4 and convert it to US equivalent salary . My incoming was only 20% of what I made in US so it should have been 5 but reality things are little cheaper in India that is 60 rupees buy a tad bit more than $1 buys in US. In other word $ is about 20% overvalued on ground reality of in India.

  8. Interesting, but also compare life quality, ameneties we gets. In mumbai could you imagine how people travel to work from cramped virar local to churchgate ? Even person getting 10 lacs Rs salary unable to afford car as petrol rates are high. In US no pollution os there and you gets swimming pool , club in most residential áreas.

    • I am shocked to know about some comments of indian peoples who are staying in US. These IT guys does are not understanding that they are being hired by US IT companies or MNC’s because of below reasons.

      – Their brain is indian not american.
      – They are cheaper than american.
      – They like to be ruled by others.

      When it comes their turn to do so something for their country, these guys have opted US just because it gives more salary, but things are not as easy as it seems in US. May be you cannot smell but you guys are under threat. Anytime US government can throw you out of the country realizing that you are taking away the job opportunities. You born here, studies here and now making money for other countries and working like a fool. This makes you perfect choice for US companies. Are you not one of the reason for rising inflation in india?

      But you should understand that the life in INDIA is not so bad as you think. There are thousands of good cities in india where 1BHK houses are even below 10 lac. An average guy having family of 4 can easily survive in 15000 INR. But it depends upon your life style and desires. In India, everyone is living. But it is also fact that majority of population cannot afford things but we must contribute to improve things rather than criticizing. Remember, if you are pointing a finger to someone, the remaining fingers are pointed towards you.

      • I dont agree with what Ankur said….
        Taking money from abroad and converting to INR…
        From where I stand it sounds like they are doing more good than harm…

        As for improving things… As I understand, 1 Indian Rupee was equivalant to 1 USD during 1947s… http://articles.economictimes.indiatimes.com/2013-08-24/news/41444029_1_indian-rupee-american-currency-continued-dollar-demand

        “An average guy having family of 4 can easily survive in 15000 INR.” I have seen people living with much lesser money… But this article is not about whether you can survive.

        Does India have the potential to grow… Yes… maybe…
        Do i see it growing? No
        Would I bet on its future growth: No
        I predict Indian Currency will become the next Africa…
        (Reasons Unknown : Dont know where all the money dissappears)

        • Vishnu & fauji,

          My comment was for those indian’s who are now settled in abroad and thinks peoples who lives in india are poor & emotional fool because now they have started earnings in USD!!! I also had chance to work with US company but i opted indian company just because i want to contribute something for my country. I got everything which is required for a family to live smoothly in India. Things are little bit difficult, but not out of control which most of the US – INDIAN’s think. And also fauj is not the only way to serve your nation, fauj can’t do anything till they have orders from ministers, which are more corrupted. Else every nations has its prons & cons, so as india, but being a indian citizen, you must not criticize your nation. This was my point.

          • @ANKUR: “Else every nations has its prons & cons, so as india, but being a indian citizen, you must not criticize your nation. This was my point.”

            This is *EXACTLY* what is wrong with INDIA. Since you are an Indian citizen, you are uniquely qualified to criticize India. If you do not find a fault with India then please continue to live in the mess that it is.

            Since I’m American, I will say that America is not the place it was dreamed to be by the founding fathers of the nation. The sooner we realise that, the sooner we can fix that. America is supposed to be a place where everyone (including poor, homeless and those that have nothing) is welcome and yet it is no longer the case. America is supposed to be the one country where through hard work alone you should be able to realise your dream but that is no longer true.

            As an American I vow to continue fighting this stupidity that we live in and fix my country for the better. In the same way, you (@ANKUR) need to learn to criticize your country because until and unless you do, prepare to live in the “swamp” (someone our current idiot of a president said of washington).

      • Bhai Tau Ankur

        Everything in life is not about ki BHK kitne mein milega.
        What is your Happiness index?????
        What is the value of your life?????
        What are you feeding ure kids with bloody corrupt officers sampling ure food????
        itna hi passion hai toh kyon nahin deshwasi fauj mein bharti hote coz thats the only institution left which works.?????
        baatein aasaan hain mere dost zindagi dekhi hai idhar.

        take care
        A Fauji

      • Hello,

        I’m an american, born here and raised through the american educational system. As natives to India, please do not speak down about yourself. Indian tech people are for the most part, better and more efficient at their jobs than their american counterparts. Plus freelance indian who still live in india can be hired FAR cheaper than an american programmer but still at a fair wage. A budding company may not be able to pay $100,000 for an american residing programmer but can afford to pay $50,000 to an indian programmer who lives in india. The indian programmer now makes approximately over 3 million rupees per year and lives very well and the company saves money. It’s simple economics and has nothing to do with race.

  9. You Morons! do not try to compare cheese and shit(chalk would be too mild a word). A very simple explanation for the difference in US economy and that of India is that US population density is 34.2 persons per sq km and that of India is 377.2 per sq km. This simply means in the US, 2 persons are sharing a loaf of bread, where as in India, 22 are jumping on a single loaf of bread, fighting among themselves to get a larger share. Apart from this, the US has a largely working government machinery and mostly law abiding people. Whereas in India, we have the worst scum as politicians and bureaucrats, the kind who need to be guillotined, ruling and deciding policy, which explains the exploding population(I will not go into the details of why this happened), most of which is the dirty shit which brings these scum to power, and other malaise.

  10. Dear Commentators & the writer, when I opened this article I had expected there may be some practical information and comparative studies or the information relating to the real issues pertaining to the people wishing to relocate but sorry to say that most of the comments are just irrelevant and writers have just indulged in data manipulations or jugglery. There is no doubt USA is a great Power and Most of the Indians specially Hindus like the US policies unless one is biased due to some political beliefs or personal reasons. Otherwise if you actually consider both have totally different way of life. Poverty is there in both countries. The problems in India may be more visible due to the number of people or due to the mismanagement of economy by the respective Governments. The lifestyle in India is not as bad as most of the writers have commented. Life style in USA is also not as much good as people have mentioned. In India there are many different classes and if you talk about the purchasing power parity between two that the number of people having far more purchasing power than average american is far more than the total US population . It may seems difficult for you to grasp but as most of you are the IT people knows the computers well can verify from World Bank figures. The real PPP of India is hidden because we have a far bigger cash economy than the one monitored by the RBI & the Government. So gentlemen if you really wish to guide people who wish to migrate to US or west guide them by contributing positively and am sure that will help many from coming to US or UK by illegal means through agents or criminal ways and make their lives hell. You explain them the Low Interest rates in US, High Medical Costs & Insurances, the truth of Social Security System and the property taxes etc. These points along with the real information like living without work and retirement life etc. As you are aware in India if you have a million dollar equ at the time of retirement means you have a stable income of Rs.6,000,000./PA or USD 100000.00 without doing anything but on other side can a person having USD1 million survive a retirement life as the Banks there will not pay him anything more than USD. 15000 P/A with which he cant even pay his car insurance or house taxes forget the other things. So in short the comparison can’t be just made on the basis of prices or value of rupee or its purchasing power. It has to be other factors and if you people wish to contribute for the benefits of others please contribute positively without saying bad about India or US or any other countries.

  11. All of you stupid Indian patriots have no idea what your talking about, look at it this way, if an average mid-level police officer wants to buy a house in Mumbai the average salary is 4000 rs a month, now the average price of a1000 sq ft house is about 4 cr on the less expensive areas, worli etc
    Considering that he DOES NOT have any other expenses and ALL of his salary is used for the house, it would take him 10,000 months. Whereas in America on an average salary of 4,000 DOLLARS a month and an average price of 200000 dollars on the west coast -2000 for other expenses it
    Would take him 100 months that’s with other expenses of 2000 dollars. The inr is basically the biggest piece of crap in the world

    • Is it so difficult for you to use Google? A peon makes over 8000 Rs. The salaries are listed on the website acbmaharashtra dot gov dot in/rti_j dot asp

      You believe Worli is one of the less expensive areas in Mumbai? What planet do you live on? And if you want to know where the cheaper flats are, Google “flats upto 20 lakhs”. Policemen don’t need to live in the most exclusive areas.

      The Indian economy versus real estate is topsy-turvy, but that’s no excuse for you to refuse to check your “facts” before you post.

    • Hey American, I assume you are a low self esteem INdian hiding behind the garb of an ‘American’. Let me try to put your average life in place: you were a below avg student in INdia….got a 60% ( if that…) in 12th….did some diploma in INdia. Eventually, joined a donation based institute and made it to the U.S. on a H1 sometime in 1999 ( along with the other Y2K bunch of morons)…All you did was window shopped at the mall, bought shoes at Payless, groceries at Walmart or a discount based community grocery store, only dreamt about having a maid, lest I forget those 2 cents/min calling cards you bought at Patel Brothers…..where you went in your Toyota Camry ( the high end dream car ), pictures of which were taken in abundance in your parking lot. HOw did it feel carrying that grocery up to the 2nd floor in your apartment. Remember, you will always be the curry smelling, wanna be IT geek who will be dying to get a senior mgmt position in INdia where you can truly enjoy the luxuries, get recognized for your position, but unfortunately you will only dream of it while you read terrible news articles in INdia Abroad newspaper that you pick up for free at the temple visit every week ( your definition of having a social life!!)

      • This reply is awesome and very true. Especially the Toyota Camry one. I am an Indian staying in US which sucks, I like London, UK more :P.
        Personally, I hate the way Indian people who come over to US live their life.
        It’s pathetic and I need to get back to my home, which is London 😛

    • Dear American Average starting salary of a Policemen in Mumbai after adding DA and the other cash benefits roughly comes to Rs.22000.PM apart from salary he gets free medical treatment for his whole family and parents. He may or may not get official free accommodation that depends on his posting and availability. To buy a single bedroom house in New Bombay you require Rs.20 lac or so. And every one who works as a police constable or ordinary person does not supposed to have a house in Mumbai similarly as every engineer working in Manhattan New York can’t afford to have a house or apartment there. I know most of the IT engineers working in US are getting around USD5000. PM, many people working with all those banks and Financial institutions in Manhattan are getting even 3-4K PM. Last sunday I was in a apartment at 42nd street New York where the rent for single bedroom apartment without utilities was USD6500/PM so can we say an engineer working in New york cant even rent a single bedroom flat near his workplace.

    4 years back 1 US $ =
    IND Rs 43.225
    (lowest) & now 1 $ = IND Rs
    67.7 Do you think US
    Economy is booming?
    No, but Indian
    Economy is
    Going Down. Our economy is in your
    A cold drink that
    costs only 70 / 80
    toproduce, is sold for Rs.9 and a major chunk
    of profits from these
    are sent abroad. This
    a serious drain on
    INDIAN economy. What you can do
    about it?
    1. Buy only products
    manufactured by
    COMPANIES. 2.You don’t need to
    give-up your
    lifestyle. You just
    need to choose
    an alternate product.
    All categories of products are
    available from
    BRUSH: –
    O –
    INSTEAD OF Vodafone
    Food Items:-
    Eat Tandoori chicken . home made food
    HUT, A&W
    Deodrant :-
    use REXONA instead of AXE , FA etc
    Every INDIAN product
    you buy makes a big
    difference. It saves
    INDIA. Let us take a
    firm decision today. BUY INDIAN TO BE
    Thanks For Spending your
    valuable time ….. I ve done my
    duty Will
    U ???

  13. in Tamil naadu, there is a Family politicain called as kalaingar.
    he and his families(he has 6 wifes , 17 children, 36 grand children as of now ) members are stolen around 200 billion from Govt of India/Tamilnaadu . if he and his families are releasing money than 1 indian rupee will get equal to 1 dollor

  14. Indian economy is mainly based on agriculture. But, at present agriculture has taken back seat, since our politicians has no idea of economics and are arrogant. Agriculture laborers are not available, since all sorts of free bees are provided including Rs 6000 allowance if women become pregnant (no logic can approve this). This is just one example I have given. Every single decision taken taken by politicians since independence appear wrong. If all the decisions are undone and allow people to work as much as they can and earn as much money as they can the country can progress without any limits. The INR exchange rate will be 1 INR = 1US dollar or even 1 INR = 1.8 US dollor.

  15. Indian economy is mainly based on agriculture. But, at present agriculture has taken back seat, since our politicians has no idea of economics and are arrogant. Agriculture laborers are not available, since all sorts of free bees are provided including Rs 6000 allowance if women become pregnant (no logic can approve this). This is just one example I have given. Every single decision taken taken by politicians since independence appear wrong. If all the decisions are undone and allow people to work as much as they can and earn as much money as they can the country can progress without any limits. The INR exchange rate will be 1 INR = 1US dollar or even 1 INR = 0.8 US dollor.

  16. These non sense articles are written with such high immaturity. WTF, comparing bloody numbers to settle somewhere.

  17. “food is relatively cheap in America when compared to price of the food with India”

    that can be rephrased as “food is relatively cheap in America when compared to price of american food with India”. You need to compare it with indian cuisine to get the real picture.

    As u say dining out in multiplexes, etc. where you’ll be buying burgers, subways etc. those cost same or more in India compared to US and these are “western” cuisines in India. Typical Indian food like Rice, Rotis, Curry etc. costs much less and so you should not be comparing the same type of food (burger for ex), instead compare an avg meal cost for a person in India or USA.

  18. Definitely its a brief discussion about inflation with a comparison with USA vs India. From my thinking India’s most inflation rate really higher than other developed countries. So I am as a Indian, very worried about this. Maximum indian any executive officer, who got his sallery bellow 40000, he really expenses a hard life with his family.

  19. Hold on guys! Comparing prices between US and India is misleading as the
    prices keep changing as the dynamics change. India is going thru a rapid
    growth. Whatever growth happened in US in 100 yrs or so, is happening in 10 ys in India.
    With this kind of rapid growth, there will be inflation and price fluctuation, not to mention the chaos.
    Comparing the living standards between these two countries merely by looking at the
    Prices would be misleading.
    Indian GDP is growing at more than 10% while US is barely at 3%.
    Growth in India will continue as long as skilled labor continues to be available.
    Once this reaches its limit, ie., when it becomes hard to find qualified workers
    the jobs will start moving elsewhere. Will it happen?
    Looking at the number of colleges and number of students graduating, this will not happen in the near future. India will continue to produce more graduates and outsourcing will continue for a long time.
    If you look at today’s India, there is a mini USA in India itself. This mini USA is growing bigger. Very soon we will see much more improvement in living standards and as well as infrastructure growth.
    However this will not go on forever. As the standard of living keeps increasing so does the cost of labor. When the labor cost becomes too much just like US, the employers will start looking for cheap labor elsewhere. Now the million dollar question is, will other countries step up to the plate and absorb all those jobs?
    It is hard. It is not just the cheap labor that matters, it is the hi-tech skilled labor and also their number. We are talking about a scenario in ten or twenty years from now. At that time the demand for labor will be so much that other countries may not be ready to supply that many graduates and that high skill level. However, if they do, then the jobs will start flowing to those countries. By then, if India had attained a self-reliable economy, then it will not only survive but will continue to flourish.
    On the other hand, if other countries fail to pick up this opportunity, then India will move into the age of automation where we begin rely on robots and other machines as human labor become very expensive. This is a very likely scenario. Even if BRIC countries [Brazil, Russia, India, China] do contribute to global economy, their effect will not be very high as the population of India will dilute all those effects. If this happens, India will eventually become a highly advanced country and will lead the world towards a brighter and prosperous future.
    In any case, India right now is in a very prominent position – High skill level and high number of graduate turn out. This is its strength. In fact this will be the strength for any nation to prosper in the future. It is not earthly resources that matter anymore. It is human skill level that decides the fate of a country.
    India should be proud to be able to give a strong hand in the global economy. Indians should all be proud of their Indian origin. The high population that once burdensome to India now has become an asset. What a marvelous transformation. We have an extraordinary opportunity to lead the world to a safe, prosperous and advanced future. This opportunity also comes with responsibility. So let brace up for that magnanimous technological evolution.

    R.S. Amblee
    Author: “The Art of Looking into the Future: The Five Principles of Technological Evolution”

    My other blogs: http://www.goodreads.com/author_blog_posts/3309127-future-of-outsourcing

    • Really “Mini USA”, infact minnier usa. Americans earn an average salary of $3000 per month, we too, but in Devalued Rupees. Come to the road with me and think. Most BPOs and IT companies in India still pay Rs 3000 in Kolkata, maybe also in other cities. GDP is the amount of goods purchased in year, just compare it with Per Capita Income. You will come to the bottomline that only Rich and Wealthier people can really afford to buy Nice goods in India.

  20. Completely mis leading.. you guys living in US dont know what you are loosing.. Purchasing power of indian rupees is 3 times higher than US dollar refer (http://en.wikipedia.org/wiki/Purchasing_power_parity) or refer to PPP adjusted GDP of india in USD term.. Purchasing power is not decided by prices of jeans it is whole basket of consumer goods..

    One example – My fiends bought hous in US in 2004 for 3000k USD that is 1.2cr INR, if he had bought house in India say in mumbai for 1.2cr now the price whould have been 5cr and in USD term ~1milion but price of house in usd has infact fallen.. these guy is crying .. he feels he did big mistake buying house in USA..

    Quit USA if you want to save whatever is left because value of dollar is going to fall much more and may godown to as low as zero… reason is simple USA is printing since last 15 years and you guys have not realised this.. I feel sorry for everyone who went to USA as late as 2000 when it was very clear that linving in USA is like loosing all hard earn money over life.. again reason is simple.. inflation tax.. you guys are paying inflation tax… read macro economis .. please for your own benefit read macro exconomics .. hereis link to material on macro economics.. this will prove what i am saying….

    • Mr Ajay chavan. I haven’t seen the video that u attached, but on other issues you are almost completely wrong and the author of article is right. You say your friend bought house in US in 2004 in 3000k USD, that house still cost maybe 3200k usd or something. But the same house now cost 5 times in India, that means that Indian currency is depreciating in buying power more AND its buying value is decreasing. That means that Rupee is depriciating in real terms. What u could have bought by 1 crore, few years before now costs 5 , but your salaries would have at most doubled maybe (if u are lucky). So tell me Mr who is losing more?

      The good thing for an american is that there is very low inflation and affordability of money is much more. An engineer can buy house in one or two year’s salary there, but in India you are not sure even salary of 10-20 years can buy you that.

    • Dear ajay chavan
      Ppp of rupee can never outpower pppof $..RBI rules prevent it from doing so..rephrase ur sentences, usa remained the leader in world market fr more than seven and half decades..not just one or two years

      • $1.25 in the year 2009 has the same “purchase power” as $1 in the year 2000.dollar is only worth .274 cents, more than 74% of it’s value lost
        $1.64 in the year 2009 has the same “purchase power” as $1 in the year 1990.
        $2.60 in the year 2009 has the same “purchase power” as $1 in the year 1980.
        $5.52 in the year 2009 has the same “purchase power” as $1 in the year 1970 dollar is taken off gold standard
        $7.24 in the year 2009 has the same “purchase power” as $1 in the year 1960.
        $8.91 in the year 2009 has the same “purchase power” as $1 in the year 1950.
        $15.30 in the year 2009 has the same “purchase power” as $1 in the year 1940. from here never increases in value only loses value
        $12.80 in the year 2009 has the same “purchase power” as $1 in the year 1930. the great depression starts to end
        $10.70 in the year 2009 has the same “purchase power” as $1 in the year 1920 start of the great depression lost more than 50% of it’s value
        $22.30 in the year 2009 has the same “purchase power” as $1 in the year 1913. federal reserve act.(voted in by DEMOCRATS)
        $23.30 in the year 2009 has the same “purchase power” as $1 in the year 1910. Dollar never dropped below 80% of it’s value
        $26.40 in the year 2009 has the same “purchase power” as $1 in the year 1900
        $24.30 in the year 2009 has the same “purchase power” as $1 in the year 1890.
        $21.60 in the year 2009 has the same “purchase power” as $1 in the year 1880.
        $17.00 in the year 2009 has the same “purchase power” as $1 in the year 1870
        $26.60 in the year 2009 has the same “purchase power” as $1 in the year 1860.
        $28.30 in the year 2009 has the same “purchase power” as $1 in the year 1850.
        $25.60 in the year 2009 has the same “purchase power” as $1 in the year 1840.
        $24.00 in the year 2009 has the same “purchase power” as $1 in the year 1830.
        $18.90 in the year 2009 has the same “purchase power” as $1 in the year 1820.
        $18.00 in the year 2009 has the same “purchase power” as $1 in the year 1810.
        $17.60 in the year 2009 has the same “purchase power” as $1 in the year 1800.
        $27.40 in the year 2009 has the same “purchase power” as $1 in the year 1774.

        the dollar is crap, and this list goes to show how crap it is. at todays value vs 1774 it’s worth $.03
        good luck making people believe that crap you just posted

        • In 1984, I used to buy dosas in Bangalore for 1-2 rupees(even less, 80p, at Sangam on Brigade Road). 30 years later, it is 35-40 rupees. I bought samosas for 25p, and now it costs 12-15 Rs. The house my parents bought for 8 lakhs(1984) is “worth” 4 crores now. A senior Class 1 central govt officer used to earn around 1800-2100 Rs. Today they make over 70,000 per month. What it took 225 years in the US, it only took 30 years in India. People who saved their money and put it into FDs for retirement got screwed big time. But the USD which was ~9 Rs is only 7 times higher at around 62, thanks to India keeping rupee high because of oil import concerns. And 97% of Indians live on less than $5 a day. Which currency is crap, again?

      • Purchasing power parity arguments can go on, but after traveling all my life, I know that today the dollars real value is Rs 25.00 only,in terms of what a dollar can buy in U.S. and the rupee in India.

    • Just go to the market and compare the amount of goods you purchased with the salary you withdraw per month, versus USA. You will come to know.
      Just ask for Medicare, you will know.
      Go to the leading Health Insurance company and ask for Maternity coverage and you will know.
      Go to any bank and ask for a Home Loan with a Salary of Rs. 3000/ 15000 per month and you will know.
      If you still think this is misleading, then you must be a really rich/wealthy person, or a fool. Believe me I was a fool too to be proud, of nothing.

  21. What about very basic needs? What I mean is,
    when I donate fifty US dollars (2500 Rupees)
    to my orphanage friends, how much can they get
    in the way of dal rice and clean clothing? mango ice cream would be nice. Can they keep the lights on?


    • Hey Chako,
      I hope u read my answer to ur very sweet question. 🙂
      A mango icecream = 15 Rs
      An ok pair of clothes for a child = 250 Rs
      Dal-Rice for a kid one time = 20 Rs
      Light depends upon whether there is power or not. There are big power-cuts almost everywhere, you see.
      But 1 unit kwh = 5 Rs
      So you see its very easy and cheap to make your friends there feel nice.

  22. DEAR SIR : G.KARTHIK I MAY THING THAT YOU HAVE RECIVED THE NEW MESSAGE YESTERDAY YOU PAID MONEY 6,500 IN INDIAN BANK AT 1:54 pm I HAVE RECIVED THE MONEY FROM YOU I HAVE SENT THE YOUR MONEY TO THE CENTRAL GOVERNMENY OF INDIA RS 6,300 I WAS TAKEN MY SERVICE CHARGE RS 300 THEY WILL TAKE THE INCOME TAX AND REVINULE YOUR MONEY TO RESIVE BANK INDIA TO INTER CHANGE THE US DOLLERDS TO INDIAN COURENCY THEN IT GOES TO NEW DELHI AND YOU WILL GOT YOUR AT PERIOD OF DATE:20/5/2012 day :SUNDAY MONTH:may thanku for useing our network to inter change the money be carefull dont invest to other peoples they will take your money and they cheat you mind that your in international company job do well next you interchange your money in credit okay thanku

  23. Hi

    I am currently on L1B visa and my visa is going to get expired in April 2012, my company is going to apply for L1A extension. Question is can we get the indian visa for our to be born child on the basis of L1A extension receipt? What are the options to get Indian visa for our child in case of our L1A extension gets denied?


  24. In fact I was in Bangalore in September last year and wanted to buy a jeans, guess what, it was over Rs4,000. I dare not buy, I could get one in Costco for $12

  25. Hmmm…..the points u made here is a good start of a discussion.
    If you compare in terms of purchasing power parity, the value of a dollar in rupee terms is around 20, whereas the exchange rate is 47. Hence the rupee is undervalued or has been deliberately made undervalue due to various reasons which we are not discussing here.
    The impact of this is whatever India is buying in dollar, it is paying more than double.
    Obviously, it is better to be in US compared to India due to these reasons. In US a decent engineer salary is more than sufficient to live comfortably and save a large part. Whereas in India the salary of an engineer is barely sufficient. In a good city of US u can buy a large lavish house in around 300,000 $, which is around approx. 5 years of an engineer’s salary give or take. If u buy a flat in Delhi today leave alone a lavish house, u will have to giveaway almost 10-15 years of salary. And buying a lavish house is impossible for even the highest salary paid officials.

    Its about time India need to think about what it is paying for resources like Oil (more than double in reality) and what it is getting for its resources like iron ore (less than half in reality). Revaluation and letting the currency to appreciate should be thought, else u are just giving away your precious resources to countries like US and Europe whose currencies are overvalued abnormally (European currencies are the most overvalued in the whole world!!)
    For more clarifications google PPP (Purchasing power parity)

    • Yeap, I fully agree that the rupee has been possibly under valued deliberately. In such case the ratio of Import to Export in terms of USD is to be necessarily maintained in the same ratio the rupee is undervalued. Considering the present situation and the ratio of rupee under valued with respect to USD, the ratio is around 2.3 i.e. India has to increase its export 2.3 times its import. This is the basic that we all need to understand and act. There can be political pressures from outside to keep our currency under valued. It is not the time to confront and get the equal ratio but it is time for all of us to look into the possible avenues, products & services those can be converted to values and exported to other countries where we can generate our export business and try and reach the ratio of under valued rupee. To make the life in India better we have to see that the ratio of under value of rupee is not further increased but rather brought down. Unless the purchase power of rupee is increased the souring prices of commodities will never come down. We have to exert ourselves to reduce our requirements of import and increase the export and realize the money. The bank interest rates are decided by RBI, which will always be few points less than the prevailing rate of inflation, this will be always the same in any country because no country would like to print bills just to pay the interest on deposits.

  26. How about if one was planning on going to India for an extended period of time in like 5 years? The interest rates in India are great (I saw 9%-11% for resident Indians) compared to the 1/2% in the US. If I were to start depositing money into a safe savings account (without going into details on how, that is irrelevant), wouldn’t you get more for your dollar than just having money sitting in a US account making next to nil? As long as the money was just kept in the account and re-invested, is what I am talking about.

    • Few things you need to keep in mind:
      – If you are living in US and have NRI status, then technically/legally your Indian accounts should be converted to NRO or NRE
      – Interest rates on NRE/NRO accounts is not 7-9% but more in the range of 3-5%
      – You need to pay US income tax on interest generated in NRE accounts. Banks like Citi actually issue you a 1099 for your NRE account. I know a lot of Indian banks don’t issue 1099, but legally they are supposed to
      – If you have more than 10K USD in bank assets outside US, the same needs to be declared in your US tax return
      – While looking at the interest rate, you need to take conversion rates into consideration as well. At least one way of conversion rate will apply (USD to INR); the other may or may not apply depending upon whether you plan to bring that money back to US or not

      I am not saying that Indian investments are not attractive, but they aren’t as attractive as they look from outside (assuming one decides to follow all rules and procedures).

  27. The Comparison is good, But it Would be more useful if we can compare in terms of % wise the Salary & Expenditure..For eg: India, a person who is getting 50,000 p.m.salary,he or she will have to spend 10,000 rent, 8000 food, utilities etc..expenses, 5000 other expenses for a family of 2 or 3.
    Where as a person in US getting around $4000 p.m. would spend $1000 rent, $300 food,utilities, $200 other expenses..So all the expenditures %-wise in India are much higher to US. Sometimeback, read an article that a Masala Dosa would cost Rs.217 in India in 2017. God only save people who need to rely on India salaries.(Of course life on H1 in US is not not that much safe compared to India).

      • Dear Kumar,
        This is very interesting thread! Could you please share if you were ever able to gather this general information at high level for general people?

      • I am not IT Guy or young. I can see a great deterioration. I earned INR little over 2000/p.m plus perks like housing, Medical, Plus transportation till I crossed 45. But life was good. My children got almost free professional education and are doing well. I invested wisely and spent wisely. I do not need to depend on my children. My advice is look at your life span and what you have plan for in your life. Jannat, Swarga, or heaven is here. Value life do not fight like kids. If you want to know about corruption. Please search Gilded Age in You tube and spend time. The wheel life is always rolling you are just a point in the wheel sometime up some time down. Learn to be axis. God bless you all.


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