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You can do a lot more with a dollar in India than in most other places on the planet.
According to the World Bank, India's purchasing power parity multiple is currently one of the highest in the world at 5.24. Simply put, it means the purchasing power of a dollar in India is more than five times the purchasing power of the greenback in the United States, according to a report in the latest issue of India Abroad.
In India, for example, the gross domestic product per capita is a low $440, but, when adjusted for purchasing power, it rises considerably to $2,230, a result of the lower cost of goods and services in India relative to the US. In other words, $440 in India would help you make purchases worth $2,230 in the US.
Purchasing power parity is nearly always higher than the GDP in less developed countries. Although India ranks 13th in the world in terms of the purchasing power parity multiple, it enjoys the highest multiple among comparable emerging nations.
Denominated in current dollars, India is the 13th largest economy. But if one adjusts the size for the relative costs of living, India becomes the fourth largest economy -- behind the US, China and Japan. Japan and many countries in Western Europe have higher costs of living than the US. As a result, their PPP is lower, converted at market exchange rates.
As the US dollar is the standard currency on which the PPP is based, the GDP and the GDP purchasing power parity for the US are the same value.
To read the full report, subscribe to India Abroad, the weekly newspaper published by rediff.com
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