From food, shelter to fuel, Indians have to spend less on essentials compared to their counterparts in the US, UK and Germany, data from a report by SBI Research suggests. Interestingly, the per capita income of India has also jumped sharply in last 8 years.
Between September 2021 to September 2022, the Consumer Price Index (CPI) has increased by 22.5 USD in the US, 12.1 INR in India, 11.4 Pound in the UK and 11 Euro in Germany. While rising inflation has led to interest rate hikes by central banks in different countries, including India, the SBI Research team looked into where does India stand in the cost of living across the group of countries. To do so, SBI Research introduced a new measure of the cost of living, indexed to Indian rupee for making a uniform comparision.
The report found that in rupee terms, if the household budget/cost of living was Rs 100 in September 2021 across all countries, it has now increased by Rs 12 in both US and India, but it has increased by Rs 20 in Germany and Rs 23 in UK.
The report also looked into the three essential components of CPI – food, energy and shelter. Exept energy, India’s performance was best in the other two segments.
Here’s what the report says about India’s performance in food, shelter and energy:
- Food price: What cost Rs 100 in September 2021 across countries, is now up by Rs 25 in US, Rs 18 in UK, Rs 33 in Germany and Rs 15 in India.
- Housing/Shelter price: What cost Rs 100 in September 2021 across countries, is now up by Rs 21 in US, Rs 30 in UK, Rs 21 in Germany and Rs 6 in India.
- Energy price: What cost Rs 100 in September 2021 across countries, is now up by Rs 12 in US, a staggering Rs 93 in UK and Rs 62 in Germany and Rs 16 in India.
India stands like an oasis
“As the IMF pointed out recently, there has been a manifold jump in cost of living across countries, with food and energy prices going through the roof. With the central banks across countries in the midst of a rate hike cycle, the cost of owning a house in respective countries has also jumped manifold. However, the good thing is that India still stands like an oasis in this era of uncertainty,” Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI wrote in the report.
According to the report, India has been more successful in managing the cost of living compared to other nations.
“Clearly, there has been a deterioration in cost of living in the aftermath of global mayhem, but India still performs significantly better compared with countries supposed to be the epitome of sound macro management. As the global economy continues to ravage through uncertainties, it thus seems that India has done quite well in managing the cost of living in comparison with other countries,” Ghosh said.
Sharp jump in Per Capita Income
While India is doing better than most leading countries in tackling inflation, the per capita income (PCI) of India for the 8-year period ending 2022 has also jumped by a sharp 57% in dollar terms, the report noted.
“An interesting observation regarding India’s per capita income (PCI) is that for the 8-year period ending 2022, as per IMF, PCI of India has jumped by a sharp 57% in $ terms, on the back of financial empowerment of people at the bottom strata, even as there has been a sharp decline for countries across the spectrum, that India has surpassed in terms of size since 2014,” Ghosh said.