Thursday, August 25, 2005

The need for conversion!!

I am not a religious leader here campaigning for a particular religion. If you think that this is going to be one of them, then you are completely wrong. What is so obvious in a foreign country? To compare the price of a commodity back in India. That's exactly what I am doing. The whole point is whether it is right comparing prices in two different countries. The topic which started as a very casual talk at 9 o' clock in the night ate away almost two hours. Four of us had our own ideas.

One of my roommates said that comparisons were inevitable and that is the whole point of having conversion rates. Imagine buying a coke for a dollar here, which costs around 20 rupees in India. By the way, the dollar conversion rate is approximately 44 Indian rupees. Does that mean that coke is cheaper in India or here? Various factors have to be considered to determine which is economical. Consider an average working personnel here with a monthly salary of approximately 3000$ and consider the same in India to be Rs 25000/-. An Indian might be shelling Rs 20/- for a coke, but his monthly income is much more than what a person here can save with a monthly income of 3000$ and by spending the 1$ for a coke. So, its all in the amount of money you get that determines the economy factor.

I too had to put my ideas (obviously)! Consider a high end model car of a decent company here. It would cost around 20000$ and the same in India would cost about Rs 8 lakhs. A person here can spend one-half or one-third of his annual salary to get a good car but that in India would mean three or four years of your earnings. Let's forget about the import duties and other things. In this case, we know which is more economical!!

The advice from the seniors here is Do not compare the products bought here with that of in India! The earning capacity here and there is totally different is the advice. But at the end of the conversation he says When you go back to India, you will find India to be very economical! That's exactly what we have been trying to prove When you come here, it is very costly compared to what you get in India!!


  1. Isn't that why PPP (purchasing power parity) method of calculating the GDP of a nation was invented! On that scale India is the world's 4th largest economy beating even Germany :-)

  2. Bladu...Bari lifalli car ondu idre saldu...think of over all living cost. House, food, service and entertainment...

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  4. Dear yadu said it right. BARI CARU ONDU IDRE AAGOLLA. If it was so, then think about me. BARI I POD ITKONDE ROLLALI BADUKTIDDE.