Maybe cheap but can we afford it?

In a report titled ' Random Walk: Mapping the World's Prices 2014 ' Deutsche Bank has compared prices in India with other countries. Prices have been compared based on Purchasing Power Parity which takes the exchange value of the Indian rupee against the dollar into account and it seems that India is cheap compared to many other countries. This is true for foreigners coming to India with dollars, euros or sterling in their pockets but for us, Indians most things have become unaffordable. Earnings in India are a fraction of those in other countries. The average annual salary in Australia is 49,000 Aussie dollars. At Rs 55 to the dollar it comes to Rs 27,00,000 per year. Only 35 million out of a total population of 1,200 million people pay income tax in India of which more than 80% on income of less than Rs 500,000 per year. Income tax starts on annual income of Rs 200,000 per year whereas in the UK tax starts on income above 10,000 pounds or Rs 100,00,00 per year, which is 5 times as much. Then there are huge taxes on every goods and services. A pint of beer in a pub costs $3.28, which is Rs 200, in India compared to $7 in New York but it costs less than Rs 15 to manufacture a bottle of beer, the rest being taxes and profits. A meal in a restaurant will attract at least 25% of the bill in various taxes. Profits of Shoppers Stop dropped by 47% in the last quarter of 2013-14 because of costs of expansion and interest. Rent at midtown Manhattan in New York is $128.85 per sq foot while in Delhi it is $135.93 per sq foot for commercial properties. That is because of a shocking rise in property prices in the last 10 years which is probably why the Consumer Price Index last year was the highest in India at 10.10% compared to 1.46% in the US. So brutal has been the inflation that consumption levels have dropped drastically so that clothing retailers are cutting down on offers, which will reduce demand even further. Sales of cars have been dropping for months now as people spend more on essential goods and the interest on loans is very high as the Reserve Bank battles to control inflation. The bad news is that retail inflation has increased to 8.6% in April from 8.3% in March while industrial output fell 0.5% in March. Manufacturing fell 1.2% in March. There is a lie spread by the Congress, and endlessly repeated by the freeloading media, that low interest rates increase investment. In 1995 interest rates were at 12% but companies were still borrowing as the economy expanded on very high savings. We hope that the new Prime Minister will be truthful and put people before self.