Indian Salaries Have More Buying Power Than Foreign Salaries


Disappointed your salary looks low compared to H1 visa holders or people working in foreign countries? Next time when you get salary, don’t compare with the person getting more in US doing the same job and get disappointed. Instead multiply your salary by three times as it costs more than 40 percent more to buy a basket of the same goods in the US than in India.

With offshoring creating many job opportunities in India, many people are getting into MNC’s operating from foreign countries, particularly from US. Once they get into a company, they will be happy with their payouts for few months. But later, they start comparing their salaries with their counterparts in US and get disheartened. But what they forget is that the purchasing power of the money in India is three times more than that in US. Let us consider the cost of living in India and US to understand better.

Food
Food is cheap in India. Let us look at the prices of the basic groceries in India and US. A standard loaf of bread costs between Rs.16 to Rs.20 in India where as the same costs more than Rs.50 in US. One dozen eggs cost around Rs.33 in India, where as the same costs around Rs.60 in US. 250 grams of tea powder costs around Rs.70 in India, where as the same costs around Rs.190 in US.

Maid
You can probably get a maid for Rs.1000 per month to clean dishes, wash clothes and even clean the floor daily. Where as for the same amount in US, you can hardly get a maid to work for 2 hours.


Transportation
Autos in India are very cheap and they will cost you nearly Rs.12 for first 1.5 km and then Rs.7 per km. Even if you book a private cab you will be charged Rs.30 as minimum for first two Kms and Rs.15 for every subsequent Km. Where as in New York City minimum taxi fare is Rs.225.

Apartment rent
A 2 bedroom flat in a nice locality costs around Rs.7000 in India where as the same costs around Rs.54,000 in US. However both the flats will not be the same. Flat in US includes central AC, fridge, gas burners, and some furniture etc. Flats are not available without these facilities in US.

Other utilities
In India, the government subsidizes gas prices. So, they are very cheap. You can get a gas cylinder for Rs.315 in India but the same amount of gas in US costs around Rs.2,250. For high quality cable pictures, you can install set top box, which would provide a reasonable amount of channels at a maximum of Rs.400 per month. But, 70 channels through cable TV in US costs around Rs.2,250. The yearly subscription price for the newspaper, Wall Street Journal costs around Rs.5,355 and its equivalent in India, The Economic Times costs around Rs.1,260.


Other expenses
Haircut in US costs around Rs.350, but the same thing in India costs around Rs.50 only. Healthcare is very cheap in India. You can consult a private doctor for Rs.150 in India. Consulting fee of a doctor in US will be somewhere around Rs.6,750.

Somebody in US may be making money, but they are surely not saving because the prices are very high and the value of services you get in US is very less. This is because of the ‘Purchasing Power Parity’.

Purchasing power parity
PPP is an economic theory that measures the amount of adjustment needed on the exchange rate between different countries in order for the exchange to be equivalent to purchasing power of each currency. Simply, PPP is the amount required to buy a certain basket of goods that can be bought in the given country with the money it generates.

Due to PPP, some of the basic and important needs of a person such as food, shelter, clothing, transportation and entertainment are cheap in India. The purchasing power of Indian rupee is more compared to the US dollar. This is also the reason so many people who have gone abroad are returning back to India even at lower pay.

Author: Deepak A Ganesh

Republished with permission from MoneyChutney.com.

Recommended Reading:
Wealth Is Commonly Misunderstood: Living Life King Size Will Make You A Beggar

VN:F [1.9.18_1163]
Rating: 4.0/5 (4 votes cast)
Indian Salaries Have More Buying Power Than Foreign Salaries, 4.0 out of 5 based on 4 ratings

Tags:

11 Responses to “Indian Salaries Have More Buying Power Than Foreign Salaries”

  1. Dolhi

    Thanks

    VA:F [1.9.18_1163]
    Rating: 0 (from 0 votes)
  2. Latha

    Fantastic

    VA:F [1.9.18_1163]
    Rating: 0 (from 0 votes)
  3. Shireesh

    Very good information.

    VA:F [1.9.18_1163]
    Rating: 0 (from 0 votes)
  4. Thanisha

    Very well written.

    VA:F [1.9.18_1163]
    Rating: 0 (from 0 votes)
  5. rahul

    Thanks Deepak!!!!
    It was really unbearable truth that even being an engineer (in my case) my salary is very low as compared to my US counterpart. Watching them in luxurious Homes and Sports car would depress me to hell. Even I would hate my life and problems. But it is Life after all. Living with this problems is the ultimate truth…. Accept it…..PEACE!!!!!
    Your article has really brought me eternal peace!!!!!

    VA:F [1.9.18_1163]
    Rating: 0 (from 0 votes)
  6. Fatima

    I am really impressed together with your writing skills and also with the format. Writing, it’s uncommon to look a nice website like this one these days.

    VA:F [1.9.18_1163]
    Rating: 0 (from 0 votes)
  7. stuffy

    Can’t compare India and US in this matter at all. Even if we take average middle-class folks, life in US is overall more peaceful, organized, and well balanced than life in India. Most Indian professionals living in the US earn about $150K+ annually and that means married couples make almost double that salary. Even if only one spouse is working, its still a LOT of money for living a super comfortable life in US even with the high tax rates.

    There is no fair scale to compare the two “buying powers”. It’s a personal choice and depends on what you want to buy. I would give up half my pay for the clean air and crispy fresh oxygen one can get in US instead of the dirt and grime and soot hitting my face at all times in India.

    VA:F [1.9.18_1163]
    Rating: 0 (from 0 votes)
    • NN

      @Stuffy – agree with you on pollution but that is different topic. I work in one of 8 divisions of Fortune 50 company – you are dead wrong on $150K. Only the direct reports to President of the division get $150K.

      There a lot of people work at 65K and not wanting to take another 10K to avoid more stress. If both Husband and wife want to work at $150K, they are probably heading for a divorce because of all the stress…

      VN:F [1.9.18_1163]
      Rating: +1 (from 1 vote)
  8. Raja

    There are so many facts in this article, yes, if you are a bachelor and count dollar to dollar then you can save more compared to India in terms of Rupees but you will lose a lot of things that a LIFE will give at that age. Once you got married and have kids with out second income either from Spouse or other avenues, you have to think twice to spend on costly items!!Life is very different from last few years here in USA , More and more work but no salary increase now it is like “Indian/Chinese Cheap Professional” here in US self, who can do a lot of overtime with out a extra Dime!!

    VA:F [1.9.18_1163]
    Rating: 0 (from 0 votes)
  9. Dilip

    Well I agree with the article.

    I know someone who was working in India, paid as so called “cheap labor”. He had a good life in India, could afford lots of stuff and have status. He then got tired of being “cheap labor” and since he could manage to afford his air ticket, went to USA.

    Well, he is at present washing dishes in a restaurant and in the lowest social status in society, no medicare and no future !

    Be happy being “cheap labor” for the rest of the world and having buying power in your own land.

    Peace !

    VA:F [1.9.18_1163]
    Rating: 0 (from 0 votes)
  10. Vin

    I liked the post and I understood where you coming at, but you forgot to mention that it also holds true when seen other way around.
    What I mean is, as already been mentioned in the post, India has cheap food, maid, transportation, etc; its all just because we have cheap labor here. And that itself explains why an IT professional in India gets paid less than their H1B counterparts in US. This one alone explains it all – Cheap labor in India, PERIOD!!
    Whether working in India or US is advantage or no gain, depends on individual circumstances. If single, probably working in US one can have lot more saving than working in India.
    And then further money should not be the only concern when making the decision.
    PEACE!!

    VA:F [1.9.18_1163]
    Rating: 0 (from 0 votes)


Leave a Reply