Those who lament the depreciation of the Indian rupee would like to know how it fares on the Big Mac Index developed by The Economist. It is based on the theory of purchasing power parity (PPP) which says that in the long run exchange rates should adjust so that the price of an identical basket of goods and services is the same across the borders. The Big Mac is the same in every country, except in India where chicken, instead of beef, is used. Called the Maharaja Mac in India, it is sold at $1.50. The corresponding prices in some other countries are Norway ($7.51), Switzerland ($6.72), USA ($4.56), Canada ($5.26), Japan ($3.20), China ($2.61). The Big Mac is, therefore, the cheapest in India but not for Indians but for the dollar-wielding foreign tourists.
Posted on: Wed, 17 Jul 2013 03:02:15 +0000
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