Indian Economy: News and Discussion (Apr 1 2011)

sumishi · Post by **sumishi** » 13 Oct 2011 11:02

Vipul wrote:Exports up 36% in Sep, imports grow 17%.
... ....

With regards to exports, interesting to read the above followed by the following link posted earlier:
Scam 2.0: How $40 bn of exports and FII flows may be fiction

sumishi · Post by **sumishi** » 13 Oct 2011 11:03

gakakkad wrote:pack of 4 of a type of "fruit of the loom" in the US would cost around 20-25 (INR 1000-1200)... A similar type same sized pack of 4 (though obviously a different brand or unbranded) one in India would cost inr 200 or something like that...

But if the comparison is based on purchasing power parity, difference will be substantially reduced.

Aditya_V · Post by **Aditya_V** » 13 Oct 2011 11:57

Vasu wrote:Aditya, I agree. That is the point raised in favour of shifting NREGA towards farming during the harvest season where the need for labour is real. Time and again there are reports that there is not enough work in NREGA. Basically they are getting doles, which I suppose was the entire social agenda of the CONgress traitors.

Krishnan, this is what I can't understand. Are the rural workers also turning into urbanites who look down upon physical labour that they are running away from farm labour? Hasn't farm labour always been tough, and in fact, ideally should have gotten easier with the advent of better tools and machineries? I know it sounds naive but still.

The point is that a certain % of our Population which is up to no good like are lazy. They like to think each and everyone who is upper middle class/ rich is lucky and they deserve everything in life but doing nothing.

Many of our poor are hard workers who clear our streets, work at homes, shops, factories, farms and Government jobs also.

But we do have a fair share of lazy persons who rather take a Government dole and do some Nam ke vaste work than work and get paid rather work in a farm/factory where the owner would require some real work done.

krishnan · Post by **krishnan** » 13 Oct 2011 12:06

Yes, people have started looking down on working in farms. They prefer working in other area but not farms. Its the people who have been working for long time with some farm owners who still come down to work.

Its hard getting workers , so people have started planting coconut trees. Workers are so less that they have even started putting up pipes to each coconut tree. Just open the main valve the all the trees gets watered. I think i am seeing the last generation of farmers in my family. I dont see anyone taking over

Dileep · Post by **Dileep** » 13 Oct 2011 14:26

gakakkad wrote:pack of 4 of a type of "fruit of the loom" in the US would cost around 20-25 (INR 1000-1200)... A similar type same sized pack of 4 (though obviously a different brand or unbranded) one in India would cost inr 200 or something like that...

I used to buy Hanes or Fruit of the Loom 6packs at $8 in Walmart. Brought one during last visit. I buy stuff of similar type (Valero) at Rs 110 a piece. Definitely expensive.

That is cheapskate SDRE comparison.

gakakkad · Post by **gakakkad** » 13 Oct 2011 17:07

^^ Wow this has sparked of a whole debate on underwear...I wanted to make a different point altogether...Any way i too am a cheapskate SDRE only.. (though i have to invest more in underwears.:O) .though you are comparing the most basic hanes/fruit underwear with a higher end one from India . or you were robbed in India and need to retake kanjoosi 101 again (these days they give "how to avoid tip to the cab driver 102 " free with that course at hairbird uni) . :O though good news for you is that particular piece is now available as a pack of 7....Here I was comparing hanes with Indian brands (like rupa or lux cozi) or unbranded maal (unbranded does not mean bad)...People often compare price of levy in the US with India..levy being an american brand would obviously not be cheaper in India...

Anyway the point I wanted to make above is that cars and LED tv's don't form the only part of cost of living...because some sdre's have a tendency to compare cost of cars and tv in the US with that in India and form an opinion about the cost of living ... But the basic cost of living is a lot more expensive in US...I mean education , books , healthcare etc... even if you are a super miser and have a family of 3 you can't bring down your annual expenses from 60k a year (in NY) ..come what may.... In India surely cars are more expensive... Until very recently even electronics used to be a lot more expensive... Higher end stuff is still more expensive in India... I mean a 46 Inch led tv costs INR 70-80K iNDIA ,,COST LESS THAN half the amount in unkil.....a full HD projector costs twice as much in India compared to US .. But these things don't define cost of living.. An years supply of medicine for a patient with diabetes , hypertension and hyperlipidemia cost $ 24000 in the US... (what might happen to 46 million uninsured) ..while the same drugs cost INR 10K /YEAR IN india retail ...(will be still cheaper in govt colleges)...

Thats what I meant when I said that cost of living is a lot cheaper in India...

But if the comparison is based on purchasing power parity, difference will be substantially reduced.

Obviously true..in fact that is the very definition of purchase power PARITY .. comparing the costs of similar products..

here's how its calculated.

http://stats.oecd.org/Index.aspx?DataSetCode=PPP2008

Abhijeet · Post by **Abhijeet** » 13 Oct 2011 18:27

The original point is still valid. Many items cost as much as or more in India than in rich countries -- not just high end electronics or cars, but many basics:

- Clothes (including underwear as dissected above)
- Toys
- Baby accessories (diapers, wipes etc)
- Furniture
- Home appliances
- Restaurants
- Basic food items like milk and fruits

For some of these categories, lower quality "PPP-priced" versions do exist, but they are often markedly inferior. If you compare like quality to like, India is often much more expensive.

The only things that seem to be cheaper in general are labor-intensive services, cartelized goods whose prices are artificially high in the West (e.g. medicines, film DVDs), and some unprocessed foods like vegetables and rice.

The reason for this price equalization is simple: China is the world's low-cost producer for almost everything. It is cheaper to make everything in China and then sell it around the world than it is to make it in India, even for the Indian market -- so the cost price of goods sold in New York and in Bombay are essentially the same (modulo transport costs). Manufacturing in India is often more expensive than in China because apart from labor everything else (electricity, transportation etc) costs more.

Unless Indian infrastructure improves dramatically and it becomes feasible to make many more goods in India cheaper than in China, this will remain the case.

Virupaksha · Post by **Virupaksha** » 13 Oct 2011 18:37

Abhijeet, make a like to like comparision.

WHich like to like restaurant is cheaper in US when compared to India?
Any half decent restaurant in US is atleast 10-15 bucks for each person (without drinks), which works out to 500-750 Rs in India, which actually is more than five star prices.

Have you really calculated the costs in milk and fruits??

In clothes, you really have to know them. I am buying big name brands in US and half of them do not last for me for more than a year, max two. I still have clothes which I bought in India four years ago. The quality of some big name american brands is atrocious. They look nice until the third wash, if you want them to last more, 50-90$ is the minimum for a pant which is almost 4000Rs. I get 3 pants in India of the same/better quality for that price.

Theo_Fidel · Post by **Theo_Fidel** » 13 Oct 2011 19:10

Krishnan is right. People don't like working on farms. Other than owners who can avoid the manual labor.

I would add that people have NEVER liked working on farms. Whats to like. I never met a worker who has loved his farm labor. They just look to survive it. It has always taken starvation level poverty and complete lack of options to get them out there in the blistering heat and rotting mud. Even in massaland, with A/C tractors and full GPS mechanization, people leave as soon as they can and farms are dieing away. It is very unstable way of working.

The key thing about NREGA is that it is pumping an enormous quantity of money directly into a very small pot. It is also forcing farmers into more and more structurally expensive methods of farming. This is triggering quite dramatic food inflation and causing the RBI to kill GDP growth.

Also coconut plantations are even more labor intensive and actually need quite skilled labor to climb the trees. The next generation will not climb anymore. Last year I saw a demo of this product. It costs 22 Lakhs and can harvest about 1-2 acres per day. It needs proper pathway and even spacing but most modern coconut plantations have those already. Don't expect coconuts to get cheaper.

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Abhijeet you missed the big ones in terms of costs.

- Water. Yes water costs more in India.
- Electricity. often much more.
- Expressway tolls.
- Public Schooling. In India Govt. Schools are unusable so a modern family must private school. The capitation fee & 'donation' my cousing paid for her daughter last year for a KG was shocking.
- Air travel.
- Complex medical issues. Esp. Cancer treatment.
- Taxi/Auto. Yes incredibly I found Chennai Auto fares higher than Taxi in massaland mileage wise. A trip from Annanager to Nungambakkam, about 5km cost me Rs 280 after bargaining. This is not very different from the $8 it would have cost back in Massaland.
- Hotel stays. Esp. to clean standards in big cities. Much more than Massaland IMO. Paid $720 for 2 nights at the Taj in Hyderabad. One step above Best Western IMHO.
- Meat. Other than Beef. Mutton goes for an incredible RS 480 per keg. This is about $5/lb.

Chicken (Bone in & Scrawny) is Rs 220 fully dressed. This is about $2.50/lb.
- Egg. A set of 36 eggs costs about Rs80-Rs90 in India. It cost $1.50 in Massaland.
- Property taxes. My dads Chennai annual property tax last year was Rs 18,000. My Missouri property tax was $760 Annual.
- Property prices. A good apartment in Chennai is now 1 crore +. My friend bought a loft in Houston for $260,000.

I could go on. India is very odd that way. The basics are horrendously expensive. It is very expensive to live properly. But you can live in a destitute manner very cheaply and survive.

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WRT restaurants. We should compare prices for say Karaikudi Chettinad in Chennai (Rs 1,600 for 4) to massaland, rather than say Vellu military mess (Rs 120 unlimited Biriyani on Sundays, no A/C, my favorite restaurant) which would not pass a single sanitary inspection in massaland.

For that matter I doubt even Saravana Bhavan or the Udipi chains would pass muster.

Abhijeet · Post by **Abhijeet** » 13 Oct 2011 22:29

Virupaksha wrote:Abhijeet, make a like to like comparision.

WHich like to like restaurant is cheaper in US when compared to India?
Any half decent restaurant in US is atleast 10-15 bucks for each person (without drinks), which works out to 500-750 Rs in India, which actually is more than five star prices.

500-750 rupees per head is 5-star prices in India.

Seriously, when was the last time you visited?

Have you really calculated the costs in milk and fruits??

I suggest you do this yourself. Milk costs us, right now, Rs. 28 per liter. Apples cost about Rs. 30 per apple.

I've said this before: there is a lot of truth to the argument that PPP exists only to make poor countries feel richer -- you can see it on this forum with people throwing out PPP numbers repeatedly to show how everyone in India lives comfortably on 50 cents a day.

Any NRI actually expecting to have PPP-denominated expenses when living in India is in for a rude shock.

Virupaksha · Post by **Virupaksha** » 13 Oct 2011 22:49

http://www.zomato.com/hyderabad/restaur ... shna-91509

PS:
1) Theo, I will not mention chennai auto wallahs and ordinary human beings in the same breadth.
2) Mutton is usually not available in walmart, but in halal/indian stores here. last time I saw 1 lb was atleast 15$.

gakakkad · Post by **gakakkad** » 13 Oct 2011 23:19

@ Theo--

Only electricity and petrochemical dependent things (airline , taxi) are more expensive in India ...

Funny you should compare property tax of Chennai , a metro city with that of some MO county ..Mo property tax in itself is lower that most places in America.(AND yours seems to be low by mo standard even)..NJ , NY and most of new england has a ridiculously high property tax... House in NJ costing 250k .. prop tax is about 5k ...Property in Suburban ahmedabad...30k squarefeet...property tax 20k inr...

Hotel stays. Esp. to clean standards in big cities. Much more than Massaland IMO. Paid $720 for 2 nights at the Taj in Hyderabad. One step above Best Western IMHO.

Funny you stay in the most luxurious Indian hotel and then call it expensive... Even shitty ny hotels charge 150 a night....decent ones start at 400...and are not near taj...Being a kanjoos sdre , i almost always travelled economy class (the only time I took a business class ticket was when i had a very sick relative in a 12 hour long flight , who was high risk for deep vein thrombosis)...Even in India i live in moderately priced hotels... I had nothing to complain about in hotels charging 3000-4000 /night... Try staying in a hotel in north east costing 85-95 dollars... see if can manage spending a night...

- Complex medical issues. Esp. Cancer treatment.

where on earth did you hear that ?

Angioplasty India with Evorilimus eluting stent (the most expensive stent in the market) + 3 days hospital stay in a very decent hospital ..Cost INR 2 lakh,..

Cost in ny presbyt...USD 25K...

Cost of getting whipples operation in India Rs 2 lakh...

Cost in US ...A lot higher

Cost of stereotactic gama knife surgery for a glioma in tata memorial.. (mind you a very high tech centre...easily comparable to sloan kettering) 2.5 LAKh if the patient is affording class..(poor patient much lesser)
... may be more if you stay in 5 star rooms etc..

cost of chemotherapeutic drugs --considerably cheaper in India ..

Plain MRI head -- 2000-3000 inr... mrcp rs 10000 ... endovasular coiling SAH -- INR 1 lakh... costs USD 30K IN US...

Please don't tom tom about quality... there are rats in Harlem gen hospital as well...

note -the above costs are of decent private hospitals... hospitals linked to medical colleges are not as bad as one might imagine... a poor Indian can get a whipple done for 7500 inr...and dialysis for free.. yes there is jugaad in gov't hospitals ..and doing some of those can result in lawsuits in the US..But the outcome is not all that bad..considering the costs involved...

Cost of milk in US 2.5-3 DOLLARS / HALF gallon (depending upon region and threshold price) (about 1.7-1.8 l) So about 1.2-1.7 / litre... And it tastes quite bland...

Anyway food inflation in India is a quite recent phenomenon linked to NREGA.... milk was like 15 /litre a few years ago....

Apples in India are expensive for a few specific reasons...

As far as schooling is concerned..yes donations is a problem in India..but non of my relatives in massaland would dare put there kids in public school... I dont know about MO but in NY people who can afford to put their kids to pvt school do so....And fees are 1000's of dollars / year...

I studied in a decent cbse private school in India ...fees then was 14k/year now it is 23k /year...All my class did very well in boards.. we had a bunch of iitians , docs , iim guys..tfta mba;s etc... Decent infra with football fields etc... In the government sector Kendriya vidyalays are not all that bad...at least not in Guj ....comparable to massa public schools .. not any worse...

cars in India are expensive because of high taxes...

In us the auto industry is heavily subsidised...

And about that underwear.. the 7 /pack one for 10 USD is the cheapest underwear in the american market.. comparable to cheapest rupa or lux cozi or vip... for 110 inr (the price mentioned by someone) one could get a half pant..

You can get a decent suit stitched for 4500 -6000 inr..as someone mentioned a decent long lasting trouser in us cost 70-90 dollars...

The best t-shirts i bought in my life were from Tibetan refuge sales that takes place in India in winters... u get very cheap yet superb jackets for 400 inr....try getting a turtle neck t shirt of cheap quality in massa for 8 dollars.

Levi/adidas brands dont stand for quality...

Having said that i agree that india has genuine problems of infra , electricity and labour laws which must be sorted out at all costs...but the present gov't is doing just the reverse by schemes like nrega...

Theo_Fidel · Post by **Theo_Fidel** » 13 Oct 2011 23:36

G,

Not sure why you want to be so argumentative. We just posting our experiences and thoughts boss.
-----------------------------------------------

Medicine is relatively cheap but high level medicine is seriously expensive. My Aunt had cancer treatment (Breast Metastatic) for about 3 years and all the chemo plus specialist stuff at Apollo ended up costing well over 20 lakhs. No special clinical trials, surgery, etc. Now it is cheap compared to massaland but still this is very expensive.

Now most would choose not to treat in which case life in India is cheap, literally.
----------------------------------------------

Point is it is fricking expensive to live a decent life of 24/7 running water, electricity and flowing sewers in India.

sanjaykumar · Post by **sanjaykumar** » 14 Oct 2011 04:02

Chemotherapy and it's attendant cost/benefits is an under appreciated scandal or perhaps scam. . Life may be cheap in India but death can get very expensive in the US.

Of course there are exceptions hodgkins, testicular cancer etc.

Singha · Post by **Singha** » 14 Oct 2011 06:21

munna to munna fair comparison would be cost of living in : bay area/NJ/DC/boston/RTP vs NCR/pune/blr/hyd/chennai. these 5 cities end as r2i source and destination for many.

vera_k · Post by **vera_k** » 14 Oct 2011 10:10

Some things like good plumbing with consistent water pressure @60psi are nearly impossible to find in India at any price. Wonder why this is so, if apartments and such sell for prices exceeding those in the first world. Demand and supply would be one explanation, but seems fishy since supply should rise to meet demand at these price levels.

Advait · Post by **Advait** » 14 Oct 2011 16:50

Why shouldn't the cost of cars and LCDs be compared, and that too of brands that are considered good quality in developed countries?

Cars, LCDs, good housing of at least 2000 sq.ft, laptops, broadband(real unlimited type, not with data or time limits), branded furniture, primary education - are all these things really cheaper in India w.r.t income.

About medical care, Glenn Beck was offensive but right in saying that in India its cheaper "because American workers like to have something called flush toilets". The "middle-class" in India benefits from the low standard of living of working class in India.

Compare the lifestyle and infrastructure (esp health and education) available to our poor people and "poor people" in U.S. and other developed countries. How many middle class people send their kids to municipality schools today? Don't tell me your relatives in U.S. send their kids to private schools. That's their choice, but the majority of students in U.S. study in public schools (their == of municipality schools), which give them a good education and great facilities. In fact, public schools are a major topic in their politics, how much does the Indian middle class, media and civil society care about municipality schools.

And malnutrition is a huge problem in India. The height difference between poor people and middle class people (both of the same region) is quite visible. How can anybody deny it?

The whole concept of PPP seems like a fraud, designed to lure in investors and make locals think that they are not that bad off. But we fool ourselves claiming "Hum to Nano mein hi khush hai, Accord ki kya zaroorat hai"

Actually even Nano is expensive for most Indians (most meaning the waiter in your typical Rs.100 sabzi rate restaurant)

gakakkad · Post by **gakakkad** » 14 Oct 2011 18:52

^^^ Even by ppp standards , india is a lower middle income country and the american per capita income is 10 times higher...

Carefully read what I said..I never said that an average Indian is better off than an average american.. I merely said that the cost of living in India is cheaper than that of the US....And I stand by it..

Malnutrition- You are talking of heights..I can assure you that the average height is increasing... So is the average birth weight...2ND thing is that you are comparing fully grown adults who spent their childhood in 80s or 90s...What was India's Per Cap income then .. It was 1/100 of that of US in those days...it used to be a dirt poor country...so obviously those people were under nourished and shorter... It takes 1 full generation to show increases in height...
Malnutrition is a problem.. But it is greatly exaggerated...And it is diminishing...Even by the accounts of my pediatrics teacher it is reducing..She used to see 10 times as many PEM cases in her time...The Indian health stats are constantly improving and will reached the western levels in a decade or so..The next 10 years will show more rapid improvement than the last..

Broadband Internet-- Yes it is a problem in India.But You seriously think 90% US enjoys 8 mbps internet that is cheap and unlimited ?in jannat maybe.. the american middle class on an average has speed of 1-2 mbps...8 mbps are very expensive..And the 50 MBPS costs 150-250 a month...Internet providers in ny are extortionists...they force you to buy cable tv with it..or a landline..even if you don't need them. how many people do you thing have that kind of speeds... However I agree that India should offer much cheaper and faster internet than the US..wHY ? the best internet speeds are in Japan or netherlands.Because they have a high population density... The higher the population density of a city the lower cost of fibre optic cabling...
Are you aware of the cell phone call rates in the US..

Branded furniture- The best furniture I have seen is in my dad's ahmedabad home..it is custom made by carpenters ... YES it is much more expensive than that of an average american home..but its quality is simply superb... He has had recliners for 23k inr... You seriously think the 200 dollar bed that you might have seen in walmart is anygood... Well I have broken one...not purposefully....When I buy clothes or furniture I want to pay for clothes or furniture and not the moronic CEO or the model that markets them...

Auto industry in us is highly subsidized ... The indian industry is highly taxed...see the difference ?

Healthcare-- Only thing that impresses me about American healthcare is the emrt ..the ambulances are superb..so are the paramedics ... I could actually ask a paramedic to take lectures on ACLS or BLS... As far as the poor 20 % is concerned , unless they end up in ER the quality of healthcare they receive is as bad as the poorest Indians.. And medicare and medicaid funding will be cut short sooner or later...making it worse... The problem in India is the partly accessibility , partly awareness. If a poor Indian reaches a medical college hospital somehow (or at least a chc) he ll be well taken care off.. Its not as bad as you might imagine... Not any worse than an american community hospital.. even though a community hospital may be somewhat better equipped for various reason (read my posts in nukkad) it does not translate into better care...Problem here is that people fail to reach the hospital due to various reasons..
Yes there are countries that offer very decent (truly decent) care to its poorest.. (norway , England partly , asstralia ).. US is not one of them.. When India reaches a nominal per capita income of 1/4th of that of US (by early 2020s) India ll have a better healthcare coverage than the US..(apart from emergency transport)..

About LCDs .. Well 10 years ago every electronics was twice as expensive in India .. None of my childhood trips abroad went without shopping for electronics... But that is no longer the case...MOST ELECTRONICS is a par ... the higher end stuff is more expensive in India... prices are in general 6 months behind US ....(prices of higher end electonics only goes downwards) ..the reason for this is that companies want to book maximum profit initially...for lower end stuff there is not even a difference... A decade from now things India may even get cheaper ..(depends on several factors)...

In US a couple of weeks of supply of medicine = cost of led tv... Believe me , I prefer the Indian model in this respect...

PPP is not accurate...but it is not a gimmick either... it is a fine concept..though a little too simplistic..It serves its intended purpose well...US has advantages over India ...but those can only be enjoyed by people with USD 200k or greater income.. (the top 3 %) ... If you make 90k / year in NJ you dont save anything... while making 30-40 lakh in India ..you save most of what you earn... believe me the BPL /HOmeless americans are not any better than the BPL Indians..only problems is that there are too many BPL Indians (though less than the activists claim of 50-80%) due to high population due to the governance deficit in the Nehruvian era...
If you are making 10-12 lakh inr or more in India you are better off than 60-70% americans ... And the Indian economy is growing...so is the standard of living..i The american economy or standard of living will reduce as time passes..

What needs to be done in India is to leave aside all the poverty stats and embrace capitalism (the real version not the american) in totality...The reason why I and some other people always lambast the ddms when they publish the exagerated lack of toilets stats or make stupid claims like poverty being more than africa is because whenever such claims are published gov't goes in the socialist mode and announces stupid socialist flagship schemes...these schemes exacerbate damage than solve problems...second reason is that such articles always reach the eyes of my firangi colleagues...and they believe them to be true .. and that usually ends up in verbal duels...

Theo_Fidel · Post by **Theo_Fidel** » 14 Oct 2011 18:56

vera_k wrote:Some things like good plumbing with consistent water pressure @60psi are nearly impossible to find in India at any price.

Domestic water pipes manufactured in India are simply not rated for such pressures. There is a reason copper is so popular in massaland but copper reacts unpleasantly with wet concrete ions and all of India builds with concrete plaster. Plastic type HDPE for domestic pipes is still very expensive and so most people install galvanized iron pipes that corrode in a couple of years.

Beyond that there is the problem of non-metering. Water is too costly to deal with the catastrophic loses that will occur in Indian plumbing equipment. At 60psi at single faulty flush valve in a toilet tank will drain a 40,000 litre overhead tank in about 2 hours. Leaving the house with no water till next days supply.

I've done some math over this. In massaland you meter every drop of water and most people are very careful about wastage. Most cities no longer even allow lawns to be watered anymore. My family of 4 has a water bill for 8,000 gallons per month which works out to about 60,000 liters per month. In India my dad fills his 40,000 liter overhead tank & his 40,000 liter ground sump every night when water comes. Yet by 6 pm the water is over. He does have one tenent family recently for a couple of years now. In effect his house uses more water in a single day than my house in massaland uses in a entire month. And the living experience is immeasurably worse.

Another thing, the recent fad in India is to go with aluminium wire (cheaper) for electricity without understanding what increased resistance in the wire does. IMO you should increase the guage at least 2 steps up compared to copper to reduce electrical wire resistance loses. If standard domestic wiring is 16 SWG (American 14 AWG), you should increase the gauge thickness to at least a 14 SWG, preferably a 12 SWG wire every where. At one of the 'High end' apartments that I looked to buy 3 years ago I noticed the wiring was an execrable 20 SWG aluminium!! Even at India's higher voltage of 220v my charts tell me this will result in resistance loses of about 25%

in domestic situation. This explains why my home in massaland consumes 700 kw/month (-A/C but +electric stove+computer+2 laptop) but my dads home consumes 1200 kw/month for 2 retired folks. It would not surprise me to learn that 50% of Indian's electric bill is purely line losses.

This is the other odd thing about India. We are immeasurably wasteful with basic resources like water, electricity, roads, railway that we do have. Every thing is horribly expensive yet we carelessly piss it away.

Instead of investing in high cost expensive plumbing fittings & electric fixtures we go cheap and pay for it with long term bloated bills. Nice.
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I merely said that the cost of living in India is cheaper than that of the US

G,
No one is saying that this is not true in certain very limited sections. A few things are cheap. But they are cheap because standards have been dropped precipitously to make it so and people pay for it with their lives.

gakakkad · Post by **gakakkad** » 14 Oct 2011 19:04

^^^ Yeah i agree....the transmission loss of elec in India is extremely high.... Sewage disposal plants too are inefficient... We were taken to a sewage plant in 3rd mbbs as a part of PSM course.. the engineer himself said that it is unsustainable in the long run...

Basic infra is the only thing that should get priority by the GOI ....the problem is that the GOI will only get carried away by poverty stats and end up making a mess...

RamaY · Post by **RamaY** » 14 Oct 2011 19:15

Theo ji

That is very educating post. I learn something new everyday on this forum. Thank you.

One thing I see lacking in India is lack of standardization when it comes to construction and infra. Probably the rules do exist but we dont see them followed in real life. Need to get my hands on the building code in india.

Advait · Post by **Advait** » 14 Oct 2011 19:49

gakakkad ji, thanks for the reply. However you completely avoided the part about public schools and municiplaity schools. You have time please go over it and respond to it. I agree with the part about not washing our dirty laundry in public, but we should not bury our heads in the sand either.

Vipul · Post by **Vipul** » 14 Oct 2011 20:28

Fantastic info Theo Sir.There was a similar post by you earlier on agricultural productivity which when put in Proper/Comparative perspective makes you go

at the level of wastages in India.

ShauryaT · Post by **ShauryaT** » 14 Oct 2011 22:07

Singha wrote:munna to munna fair comparison would be cost of living in : bay area/NJ/DC/boston/RTP vs NCR/pune/blr/hyd/chennai. these 5 cities end as r2i source and destination for many.

Is Mumbai considered a class apart or too shitty to be considered?

Prem · Post by **Prem** » 14 Oct 2011 23:47

PayPal has been wrangling with legal issues in India over the past year and has had to bow to several demands of the Reserve Bank of India (RBI), chief among them being imposing a per-transaction limit of $500 on Indian users. Today, however, the company announced that said limit had been raised to $3,000, according to a post by Pluggdin.
The PayPal announcement reiterates that all Indian users need to add their Permanent Account Number (PAN) and Purpose Code and hook up their bank account to PayPal in order to continue using the service. The daily withdrawal requirement that it imposed last month also remains in place.Despite the continuing restrictions, however, the significantly increased per-transaction limit must come as a relief to exporters of goods and services in India who rely on PayPal to receive payments from overseas. Hopefully, the eBay-owned company will aggressively work on its issues with the RBI and lift its other restrictions as well.

http://thenextweb.com/in/2011/10/14/pay ... -in-india/

svinayak · Post by **svinayak** » 14 Oct 2011 23:54

RamaY wrote:Theo ji

That is very educating post. I learn something new everyday on this forum. Thank you.

One thing I see lacking in India is lack of standardization when it comes to construction and infra. Probably the rules do exist but we dont see them followed in real life. Need to get my hands on the building code in india.

Indian stds have not been inmposed in the industry.
India has to create its own stds so that manufacturing of those parts are done inside India. This is a must to make sure that imports dont kill Indian companies.
Industry association have to ensure that Indian interests are at the top

Uttam · Post by **Uttam** » 15 Oct 2011 01:03

Forex reserves rise by $749 million

RBI seems to be buying FOREX again. I am perplexed by this move. With INR weakening and inflation so high, buying FOREX will further worsening the situation. Weaker Rupee helps not only exporters but also all the remitters of blackmoney.

Singha · Post by **Singha** » 15 Oct 2011 05:59

>> Is Mumbai considered a class apart or too shitty to be considered?
er now many local upper-middle class indians (the brf cachement) want to settle in mumbai? none I know of. people can make their own call 500 sq ft 1bhk or 1800 sq ft 3bhk at same price in any other metro.
how many r2i to mumbai vs the other places?

Vipul · Post by **Vipul** » 15 Oct 2011 06:28

I thought your post was with respect to the IT-Vity crowd R2ing to India and hence could understand Mumbai not being in that list otherwise i know a bunch of people who have gone back there, just like i would when i finally do.

Prem · Post by **Prem** » 15 Oct 2011 09:10

http://www.thestreet.com/story/11278145 ... ntial.html
Starbucks Sees India's 'Latte' Potential

NEW YORK (Trefis) -- According to Starbucks' (SBUX_) spokesman Corey duBrowa, Starbucks' talks with the Tata group are "moving forward" and it hopes to make an announcement about the partnership soon. The partnership aims to take advantage of the various businesses running under the Tata group.
The group's business spans across hotels, retail chain, steel, chemical, tea, software and automobiles among others. This partnership could provide Starbucks instant access to Tata's vast presence throughout India. Starbucks' competitors in the broader market for specialty coffee include

Dileep · Post by **Dileep** » 15 Oct 2011 10:15

Let me make a MACRO level comparison. I live almost the same way here as I did in massa. I used to spend average $2.5 to 3K including rent. Here I spend around 60-70K adding a rent component, which is half in absolute terms.

There is no capital component in either expenses. No loan payment. No mortgage. Nothing. All are just regular expenses onlee.

I happen to make around 70% of the income I had in massa here in absolute terms. So, I see that here it is 30% cheaper than massa. But, the bigg anomaly is that it is just a play of luck that I landed in the current gig (which is coming to an end in a few months as I read the tea leaves). I would only make HALF of the current amount when I move on. ie it will be only 35% of the massa income. THEN, I would find that this place is 40% more EXPENSIVE.

So, the verdict is, India is EXPENSIVE for an ITVty mullah.

Abhijeet · Post by **Abhijeet** » 15 Oct 2011 13:43

Most of the items I mentioned as having price parity in India -- which I wrote down simply by looking around my apartment -- have the same prices nationally, so it shouldn't matter which city you R2I to. Restaurants are possibly the only exception.

If you don't buy much in the way of mechanized devices, drive around much, eat out much, or have kids, India is probably significantly cheaper than an urban area in the US. Not otherwise.

And of course if you enjoy living a destitute lifestyle like Theo mentions, there's no place like India. It's much cheaper to live under a bridge in India than in San Francisco. Think of the savings!

Hari Seldon · Post by **Hari Seldon** » 15 Oct 2011 15:13

Not sure what the 'argument' is about really. There no but no doubt that Yindia doesn't hold a candle to any of the OECD, much less the mighty khanate itself, when it comes to living standards/quality of life and what have you? Yindia is boor SDRE third world for a reason.

And regardless of what people say, nobody R2Is to India because they somehow love the relative stds of living in Desh only. It is (almost) always because of other reasons - family issues, job issues, visa issues, etc etc.

Still, having said that, it is heartening to see that at least some aspects of day to day living in India are improving for those in the upper-middle classes in Desh (no candle held to the poorest khanlanders at all, mind you) on an absolute scale compared to 15-20 years ago. Gated communities with common provision of private services (security, maintenance, pani-bijli etc) have made at least a few islands in urban India livable for those unfortuinbates who've been to heaven (tasted khanland living standards) and are forced to return to the turd world for whatever reason.

Heck, I too R2Ied and there's not a day when SHQ doesn't lament the R2I move. Of late its come down to once a week from once an hour, 2+ yrs after the move...."whew!"

Meanwhile, pls continue beating down on dirty smelly turd world India compared to shining khanistan. Such pointed dissing and pi$$ing have chathartic therepautic value.

Abhijeet · Post by **Abhijeet** » 15 Oct 2011 15:51

Well, my original post was in response to someone claiming that everything in India was magically cheaper (and higher quality) than items in the US. I just pointed out how this was not the case for a range of common items, not just exceptional cases. PPP comparisons only go so far, and are not that relevant for a majority of items.

Not sure about cathartic, but certainly true.

Jaspreet · Post by **Jaspreet** » 15 Oct 2011 17:02

In India my dad fills his 40,000 liter overhead tank & his 40,000 liter ground sump every night when water comes.

Theo,
Your post is informative but are you sure about this 40,000 litre figure? A tank with 40,000 litre capacity will be huge, huge, huge.

In Delhi, I've seen 2,000 litre tanks servicing a 3 or 4 storeyed home. It is filled everyday when water is supplied by the city. And such a tank looks rather large. I believe it takes an hour or so to fill up. The water is supplied only for two hours. A 40,000 litre tank should take days! Unless the water is supplied at a tremendous pressure, and you said that isn't so.

Here, for example, is an image of a 2000 litre tank

Here is an image of a 40,000 litre tank.

Pratyush · Post by **Pratyush** » 15 Oct 2011 17:12

Scam 2.0: How $40 bn of exports and FII flows may be fiction

The method of analysis seems to be flawed as they have not corroborated the import data of the nations that are destination for Indian exports.

But on the whole this supports what my paan wala has been telling me over the past 3 to 4 months.

gakakkad · Post by **gakakkad** » 15 Oct 2011 17:15

Dileep wrote:Let me make a MACRO level comparison. I live almost the same way here as I did in massa. I used to spend average $2.5 to 3K including rent. Here I spend around 60-70K adding a rent component, which is half in absolute terms.

There is no capital component in either expenses. No loan payment. No mortgage. Nothing. All are just regular expenses onlee.

I happen to make around 70% of the income I had in massa here in absolute terms. So, I see that here it is 30% cheaper than massa. But, the bigg anomaly is that it is just a play of luck that I landed in the current gig (which is coming to an end in a few months as I read the tea leaves). I would only make HALF of the current amount when I move on. ie it will be only 35% of the massa income. THEN, I would find that this place is 40% more EXPENSIVE.

So, the verdict is, India is EXPENSIVE for an ITVty mullah.

I did not compare incomes of US and India for a given profession.. They are incomparable and will remain so for a decade..my annual stipend as a resident doc = USD 50 K...While the stipend in desh is 3.4 lah to 4.8 lakh per year.. 1/6th of the american stipend...off course the residents who are American have a debt of 150k on an average...(which i and other foreigners grads doing residency in khanate don't )

I merely compared lifestyle at a particular nominal income... And you proved the point yourself by being able to maintain an american lifestyle at 50-75% of the income level... An american earning 50-75 % of an it-vity munna will not be able to spend 4000k per month without seriously jeopardising finances..

For a given level of nominal income India remains cheaper than khanate except for those who want to buy clothes which magically become better when labelled as lee/ tommy hilfiger/gucci . Or buy high end electronics frequently on the very day they are released and don't even want to wait half a year , or share with the americans their love for gas guzzling SUV'S...Or those who compare the cost/cal of an Indian 5 star restaurant with that of dumkin do nuts in the US and than say that dumkin do nuts is cheaper.. so food in us is cheaper.

Anyway location in US is an important criterion as ny /nj,most new england have a considerably higher expenses in various forms in camparison to places like Tennessee or mo..

Theo_Fidel · Post by **Theo_Fidel** » 15 Oct 2011 19:20

Jaspreet wrote:
In India my dad fills his 40,000 liter overhead tank & his 40,000 liter ground sump every night when water comes.
Theo,
Your post is informative but are you sure about this 40,000 litre figure? A tank with 40,000 litre capacity will be huge, huge, huge.

Jaspreet,

The difference is that this is Chennai you are talking about. Everyone builds as big a tank as possible esp. if you plan to rent. My dads sump underlies a 2 car garage and the roof tank consists of 2 syntex tanks that have 20,000 liters stamped on the side. My estimate was that the sump has a total volume that is similar. During droughts you buy 20,000 liter tanker loads. They don't wait.

Keep in mind that in Chennai the water pressure is so weak that if the water level is 2 foot above the inlet the water no longer comes in. Needs very light good ball valve. So people build truly humungous sumps. I can easily stand in mine & I'm 6' plus. The bottom is a good 3'-4' below the inlet which itself is about 3' down. We are lucky, end of the street and near Kilpauk (pumping station).

Dilli-Billi kahin ka...

..comments Vina, on a 2000 litre tank?

Jaspreet · Post by **Jaspreet** » 15 Oct 2011 19:49

Keep in mind that in Chennai the water pressure is so weak...Dilli billi

I don't think Delhi gets any special treatment in this respect. The water pressure in the locality I lived in is so weak that a motor has to be used to pump it up to the first floor (using the Indian convention of GF, FF, 2ndF, etc.)

Compare that to the situation 40 years ago when we moved to that locality. Water was supplied twice a day from 4 am to noon and then from 4pm to 11pm and it was at a good pressure. Not many people had tanks (or tunkee as we called them) to store water.

I don't know about Chennai but from what you tell me the situation is just as good or bad as in Delhi.

shyamd · Post by **shyamd** » 15 Oct 2011 21:47

Shyam Saran: The coming global crisis - is India ready?

The country must urgently draw up contingency plans to shield itself from the imminent global financial crisis
Shyam Saran / September 21, 2011, 0:50 IST

The coming global crisisRecent developments in the US, the euro zone and even China hold out the depressing prospect that the global economy may be heading towards another financial and economic crisis, perhaps even more serious than that of 2008. In the United States, massive stimulus packages totalling over $1.5 trillion in the past three years, coupled with a negative real rate of interest, have failed to kick-start growth in the economy and unemployment remains at a disappointing nine per cent level. These economic woes are exacerbated by a political gridlock in Washington, with a beleaguered President Obama unable to provide effective and credible leadership.

The situation in Europe is worse. In the euro zone, the financial and banking crisis has been followed by much more dangerous sovereign debt crisis, with several governments on the verge of default. What began as a problem affecting the smaller peripheral economies of Ireland, Greece and Portugal is now buffeting Spain and Italy, with even France facing investor anxieties. The disconnect between a single European currency, the euro, a single European Central Bank and a fragmented fiscal arrangement, comprising 17 sovereign and independent governments, has now reached an inflection point. Either the European Union (EU) moves rapidly towards a de facto fiscal union or else abandon the single currency. So far, EU countries and its most powerful members, Germany and France, have avoided confronting this challenge head-on by various Band-Aid solutions such as bailout packages for Ireland, Greece and Portugal. However, if Italy, whose exposure to the global banking system is $262 billion, also needs to be bailed out, there will simply not be enough cash to go around.

China appears to be in relatively better shape with a GDP growth rate near the 10 per cent mark, booming exports and still rising foreign exchange reserves. The latter are now near the $3 trillion mark. But China’s vulnerabilities are real even if they are masked by these impressive figures. Inflation is officially around five per cent but the real rate is estimated to be much higher. This is partly the result of a massive $600 billion liquidity injected into China’s economy in 2008 to avoid a major deceleration in its growth following the global economic downturn. Non-performing assets of banks are reportedly rising quite rapidly, while spare capacity in the real estate sector, a major engine of growth over the past several years, is said to be as high as 30 per cent in metropolitan cities like Shanghai. China’s economy continues to be largely export-driven and any major disruption in the major export destinations such as the US and Europe will inevitably have knock-on effects on China. Were the US dollar to decline steeply in value, as is being predicted by several analysts, much of China’s largely dollar-denominated assets would evaporate into thin air.

It is true that China’s foreign trade with Asian, African and Latin American countries has been increasing rapidly in the past few years. If there were a gradual and steady decline in China’s trade with the traditional Western markets, the incremental rise in trade with newer markets would facilitate a relatively smooth transition. In the short run, however, decoupling is simply not realistic, whether for China or for other emerging economies.

Why is the next round of global financial and economic crisis likely to be more serious than the previous one? This is because the armoury of monetary and fiscal tools available to governments of key economies now lies virtually empty. Most of the arrows were fired in the immediate aftermath of the 2008 crisis, in a desperate attempt to avoid a catastrophic meltdown. This succeeded to some extent, particularly in view of the urgent and co-ordinated response which was launched by G20. Were another crisis to hit tomorrow, there is simply too little policy space available for countries to launch another massive rescue operation. Added to this grim reality is the fact that today confidence in the ability of governments to deal effectively with persistent economic problems is at an all-time low. And G20 is nowhere in sight.

What does this mean for India? There is satisfaction over the demonstrated resilience of the Indian economy after the 2008 crisis and early recovery of rapid growth. But we need to be cautious in drawing conclusions from the post-2008 experience. One, the huge stimulus injections into all the major economies of the world, the US, EU and China, meant that demand for Indian exports in these markets could recover their trend line quite rapidly. Two, India adopted its own stimulus package by allowing fiscal deficit to rise to nearly six per cent, though this led to severe inflationary pressures in the economy. If another crisis hits the global economy, the cushions available in 2008 no longer exist. If western economies are unable to reflate, our exports will be severely affected. Given the already high level of inflation, any increase in fiscal deficit may be harmful to the economy and politically risky. A steep decline in our GDP growth rate may be unavoidable.

It is sometimes argued that India is better prepared to ride out a global downturn because it is still a mostly domestic-demand driven economy. This is only partially true.

India’s foreign trade in goods and services is already over 50 per cent of its GDP. We have seen recently how sensitive Indian securities and currency markets are to global cues. We are not as insulated from global developments as we would like to believe.

To face the next crisis, some urgent contingency planning is essential, including thinking of the unthinkable, such as a collapse of the US dollar or the break-up of the euro zone and how these may impact the Indian economy both in the short and the long run. Perhaps China may emerge as an even more serious competitor. Government and business will need to work together to draw up co-ordinated strategies to minimise adverse consequences. The crisis may even provide an incentive to fast-track long-pending economic reforms which are, in any case, critical to sustaining the long-term growth prospects of the Indian economy.