Comparing Indian business

[mhcrxlc at dir.manchester-computing-centre.ac.uk]

Tony Good writes:

>I can certainly confirm Joydeep Mitra's comments from personal field
>experience.  A relatively well-paid manual labourer in a small South India
>town
>in the mid-80s might get Rs30-40 per day.  They would have to work 290
>days per
>annum at Rs 40 to earn $360.  Clerical workers might be even worse off; temple
>staff earned around Rs300 per month (admittedly with some meals as an extra).
>Surely there is no controversy whatever over this kind of figure, and I cannot
>understand why Lance Cousins finds them hard to believe.

I have no particular quarrel with the figures in rupees (I have not checked
them). It is the suggestion that they can be translated into dollars at
prevailing exchange rates that I object to, if that is used to produce
comparative standards of living. Exchange rates are simply an economic
artefact, produced by government policies.

Put very simply, for this purpose, the amount in rupees required to produce
food for a day in India must equal the  amount in dollars needed to produce
a minimal food requirement in the U.S.A. or Europe. Certainly, a Manchester
worker with a family would have difficulty in surviving the year on $360 if
that were truly his whole income.

Moreover, you must take into account non-monetary income or you get the
absurd result for a peasant growing his own food that his annual income may
be zero or very little more than this.

This critical for India where large numbers outside or partially outside
the monetary economy distort the average figures radically.

Lance Cousins

MANCHESTER, UK
Email: mhcrxlc at dir.mcc.ac.uk