America is the world’s richest, but India is not poor country. Recently one survey conducted in US to name three words which strike in their mind when they hear the name “India”, most answered “Poverty, Taj Mahal and Indira Gandhi”.
Such “poor” image attributed to India shows Color Discrimination and Race superiority policies followed by Foreign Newspapers. Our NRI Software Engineers often show pity towards their counterparts for their Salaries and income directly substituting 45ruppers to a dollar. But I lets analyse that.
10% of Americans are poor, 36.5 million in numbers, population in US is 301,139,947 as of mid-2007. That’s just more than 12.12%. Poverty in India is 226.5 millions, in percentage it is 20.02%. Poverty in India is 8% more to US. But remember don’t try to change every thing directly from Dollars to Rupees. In US a 3 member family needs minimum of 1100$ monthly income any income less than that will mark that family as poor. But in India if your family income is $1100 a month, you will be rich. So, please don’t make a $45- 1 rupee, substitution. Remember Coffee in US is 1.5$(60-65 rupees) and in India the same cup of coffee costs not more than Rs.10 (You will get a biscuit as bonus).
When dollar is adjusted for Purchasing Power Parity, that returns, 4.56 rupees a dollar, so, cost the coffee will be 7 rupees some thing reasonable.
But if you earn $14,400 you cant be in Middle Class, If you want to be in Middle Class Income group in US, your family must earn $40,000 or more. But the fact is as per 2007, total of 50% Americans belongs to families whose income is less than $40k. And total of 28.22% American families earn less than $25k.
Okay now, what about rich in America? In America if your family income is more than $1,00,000 and your family has $8,50,000 fixed assets you will be in Top 10%. Now I will make direct exchange rate conversion. 1,00,000$ turns out to 43,00,000 rupees and fixed assets will be 3,65,50,000. So, if you earn 40 lakhs a year and if you have fixed assets worth 4 crores in India you will be regarded as rich in US too.
Unfortunately only 1,70,000 Indians fall into that category, of 7.7 million millionaires India stands at 23rd place, in case of billionaires we are at 9th place (by 2009).
Lacking rich never mean a country is poor, more middle class people means, a better country since, less gap between rich and others, this situation is deserved by all countries, lower income gap means, income is more equally distributed more peaceful country.
What about exchange rate adjusted to PPP, if you can ear 4.5 lak rupees a year and own 40lakh assets you will be rich, in this case by 2015 11% percent Indians will earn that much amount. So, by 2015 Indians will earn 10% at Top and 22% at the Bottom ( Compared to 10% Top and 28% Bottom in US by 2007). SO we are just 8 years back to US. (Keeping PPP fixed, but if it fluctuates much, people who are in middle will suffer not top and bottom people).
Again, what about people who are below middle class in India, 54% India population belongs to Below middle class income groups, in the case of US its 50%. But unfortunately, saving rates in India lower income families is less, if you save 1$ in US, with that 1$ you can buy assets worth more than $1 in India.
What about IT salaries. The median salary of US IT professionals is $40, bottom 10% mean is 21.6K and Top 10% mean is $70K. Direct exchange rate substitution is illogical, so I am use exchange rates adjust to PPP. In determining PPP we use cost of buying various commodities in both countries, so in earlier case the PPP stands at 12% to 25%. But in case of cities the PPP will differ less, 25%(Necessities) to 36% (House rent), so at the high side PPP will be Rs. 8.5.
So, median salary $40 will be Rs.340K, the bottom will be Rs.183.6K and Top will be Rs. 595K. Companies like Infy, TCS , Satyam, CSC, .. offer 3.5 lakh pay for freshers. So, a fresher’s income fall into Median income of his US counterpart. Yahoo, DEShaw, Google, MS, .. offer 5.5 to 13 lakhs per annum to fresher. Which is higher than his US counterpart, when adjusted to PPP. So, a fresher earns equal to US IT professional, after 3,4 years branded IT professional will earn better to US IT professional. So, there is nothing for US IT professionals to pity in our Software engineers. US IT people earn in worse than our Indian IT professionals.
The poor image of India is just an act of throwing mud by foreign media and our NRIs. When England Queen visited US, our great NRIs raised their voice against poor publicity given to “Real Time Royalty” but they forgot that Vajpayee’s visit to US restricted to small box item news US papers, but no NRI talked against that. Both please change your attitude.
Vrushali.
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