Mumbai may be terribly expensive for the average Indian, but the country's commercial capital is the cheapest mega city in the world, according to a study released on Tuesday.

According to UBS Prices and Earnings Update, August 2011, Mumbai overtook 73 cities of the world to take the cheapest city crown with 40.2 points.

The catch, however, is that the study excludes rent while coming to its conclusion. Mumbai is followed by Manila (45.3) and  Delhi (49).

Interestingly, Mumbai also has the lowest gross wage level, followed by Manila, Nairobi, Jakarta and Delhi.

According to the report, the most expensive cities of the world are Oslo (139.1), Zurich (135) and Geneva (133.1). These cities remain in these particular ranks, even after excluding rent.

In the gross wage level category, Zurich, Geneva and Copenhagen stood first, second and third, respectively. In the domestic purchasing power category, Mumbai stood fifth among the bottom five, just ahead of Jakarta, Nairobi, Manila and Mexico City.

Delhi stood two positions above Mumbai.

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Every three years, UBS Wealth Management Research publishes an in-depth study on prices and earnings, updating it in the intervening years.

The most recent standardised survey of prices and wages in 2009 included 73 cities all over the world.

In 2010 and again this year in 2011, UBS Wealth Management Research adjusted the most important indices from the 2009 survey for cumulative inflation, GDP growth and changes in foreign exchange rates.

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New York City is the base city with the index set at 100 points.

The questionnaire used for the survey covered 122 goods and services, and included 112 questions pertaining to wages, payroll deductions and working hours for 14 kind of occupations.

In July this year, the Economist Intelligence Unit's Worldwide Cost of Living survey placed Mumbai in the third position and Delhi in the fifth position among the cheapest cities to live in across the world.

Karachi was the world's cheapest city.