The Theory

Moving to a new country often involves adjusting to a new currency. As much as my mind can't intuitively wrap itself around miles, I have a hard time with the feeling of Rupees here in India. Thankfully, the current economic situation provides us with some easy answers.

The present economy helpfully provides us North Americans with a nearly-round conversion rate:

$1 CAD / USD : Rs. 39.1

We can exploit this fact by rounding up to Rs. 40 per dollar and taking other factors into consideration. The economy of India is significantly different than that of North America. Housing is much more expensive. Food is much cheaper. Compared to the cost of living in your average Canadian or American city, the cost of living ratio is approximately:

1 : 4

You see where we're going with this, ya? To get a feel for prices in India, all you need to do is apply this ratio:

1 : 10

Canadians/Americans: That is to say, for every dollar you would spend in the US or Canada, you should prepare to spend Rs. 10 in India. This obviously won't be the case. I've spent Rs. 2000 (which feels like $200) on a bad bottle of wine. I've spent Rs. 5 (which feels like $0.50) on a sandwich. But you get the idea.

Indians: Conveniently, the inverse is true. If you move to the US on a US salary, imagine every dollar you spend is Rs. 10. A $50 bottle of wine should taste as good (probably better) than an Rs. 500 bottle of wine. $400 for an iPhone? That should hurt as much as spending Rs. 4000.


The difficulty here is that India's economy is a great deal more interesting than North America's. Some people in India live on Rs. 500/month. Could you live in Denver for $50/month? On the other end of the scale, we have inflated prices driven by foreign currency, which complicates the conversion even further. For now, let's assume you're a member of the youthful middle class in either country and examine some sample costs.

Cleaning Lady
Rs. 1000 /mo => $100 / mo

$50,000 => Rs. 500,000

Rickshaw / Cab ride
Rs. 50 => $5

Cheap meal
$4 (McDonald's) => Rs. 40 (delicious)

Expensive meal
$200 (delicious) => Rs. 2000 (Meh.)

Imported iPod stereo
Rs. 16,000 => $1600 (in India)
$400 => Rs. 4000 (in Canada)

Delicious street-side masala chai / disgusting Starbucks coffee
Rs. 2.5 => $0.25 (in India)
$4.25 => Rs. 42.5

Those last two items are intended to illustrate the sliding scale. You would never pay $1600 for an off-the-shelf iPod stereo (one hopes), nor would you ever find a coffee shop willing to serve you a cup for $0.25.

In general, "the high life" is better lived in Western countries... or in India on a Western salary, if you have such a luxury. Otherwise, you'll find the cost of living comparable in India, with regular expenses such as food or tea accounting for very little of your budget.

Is there an easy conversion rate for two countries you've lived in?

1 comment:

Brent said...

Hi Steve,

Things sound a hell of a lot more complicated in India then down here in Iquitos, Peru, S.A.

Right now I was say $1 CDN = $1 USD and $1 CDN = ~3 PEN (Peruvian Nuevo Sole).

A price for everything really depends on where you buy everything is geared towards different socio-economic status.

In Lima (the capital) I can go buy an excellent Argentina steak and Chilean bottle of wine for 150 USD at the upscale shopping center Larco Mar which overlooks the Pacific Ocean. Or in Iquitos (largest isolated city in the world, which is conveniently located in the middle of the Peruvian rainforest near the beginning of the Amazon river) I can purchase a decent local lunch for 5 soles and travel in motorcars (motorized rickshaw) from work to my apartment that is a distance of 5.5 km for 3 soles. In Regina when I travel from a friend's house to the airport, it costs $20 CDN; however, it is in a taxi and -35 deg C not +35 deg C.