Hey Mister! Can You Spare a Rupee?

It is almost rhetorical to speak about poverty in India. How many times did your mother say "Eat your dinner, don't you know there are people starving in India?" As a developing country, India is among the top growing nations but the growth is palpably uneven. The economy is growing at approximately 7% per annum and currently has the 11th highest total GDP at $1.8 trillion but the incredible size of the population means that per capita GDP is only $1,414 putting them in 146th place (all quotes are in US  dollars). Purchasing Power Parity (PPP), however, raises this to $3,650. To simplify, PPP takes into account that many items, especially food and clothing, cost less here so an Indian can afford to make less than an equivalent NA. This is not a Economics lesson but just to get some perspective, Canada ranks 10th in GDP at $1.85 Trillion with a per capita GDP of $51,000,  also 10th. Our PPP is lower at $41,000 because things cost more in Canada than our neighbours to the South will pay for comparable goods. PPP also measure the strength of the dollar so on the next measurement, our PPP may go up.

Of course these numbers are averages, there are lots of people in Canada making less that $40K, but here is where the numbers diverge, a NA earning $40K is by no means wealthy but s/he is not homeless either. An Indian making $1414 is. Speaking of rent only, a 1 bedroom flat with kitchen (1BK) in NA will vary between $450 to $1000 per month, so between $5500 and $12000 per year, well below the GDP level but in India a 1BK will run closer to 8000rp ($135Cdn) per month or 96000rp ($1620Cdn) per year, already exceeding the individual GDP. Homelessness is not a problem in India, it is a way of life.

Income disparity is a problem the world over but it is especially pronounced in India. The latest Forbes list includes 100 Indian Billionaires but an office worker will earn approximately 1000rp ($17Cdn) per day or 20,000rp ($337Cdn) per month.  An office worker, however, must be very well educated, a college degree is a minimum requirement which makes it very difficult for the lowest classes to climb out of poverty. Children of the poor cannot gain the education that they need to move up so they stay poor and have more children who will be poor. Most businesses are sole ownership with minimal staff and there is not the plethora of retail and/or restaurant opportunities that can be found in NA so the largest group of Indians, at least 50%, live a hand to mouth existence earning less than 100rp ($1.70Cdn) per day.

For an office worker, rent represents about 40% of their income which is consistent with other market economies. Food and clothing are generally less than in NA which increases the purchasing power of the rupee inside the country. A kilo of rice is 50rp (.84Cdn) compared to $3 in Canada, onions are 30rp (.51Cdn) per kilo, in Canada $1.47 per kilo. A 2L bottle of Coke is 75rp (1.26Cdn) which will cost $1.99 in Canada. You can spend more if you want but you can buy a pair of shoes in a department store for 500rp (8.43Cdn), same for a brand name golf shirt like Polo or Izod. A woman can buy a nice dress for 1000rp  (16.87Cdn) and leggings (since she cannot go bare legged) for 350rp (5.90Cdn). These are prices you will find in larger stores and malls but Indians spend most of their money at street vendors and are paying even less. One thing you will not find here is a Dollar Store but at these prices, everywhere is a Dollar Store.

Save up those rupees though if you want a computer or a mobile phone. A base line laptop computer is 30,000rp ($505Cdn) which is about what you could pay in NA but it makes it very much a luxury item in India. Mobile phones are similarly priced but are a necessity as the local phone system is expensive and unreliable. Many Indians forgo laptops and desktops and use their handhelds for internet access.

Really, you're wearing that?