Mumbai Costlier For An Expat Than Melbourne, Frankfurt, Says Mercer Report
How good is India for someone who plans to come here and work? This year, Mercer rankings suggested that although Mumbai is a top city for expats, it is far more expensive than Melbourne and Frankfurt. Hong Kong is the most expensive in this regard. Cities across five continents and prices of over 200 basic needs were used to arrive at the conclusion while New York City was the base of these calculations.
The money involved
Cost of living for an expat in Mumbai is far more than global peers. While Melbourne is ranked 58th, Frankfurt is at 68th position when it comes to cost of living while tinsel town Mumbai is at number 55. Other Indian cities such as Delhi is comparatively more pocket-friendly and occupies the 103rd position while Chennai and Bengaluru are at 144 and 170th position. Among the Indian cities surveyed, Kolkata is the most inexpensive for an expat to live and work in.
Where are they spending?
One of the reasons that makes Mumbai expensive is the spend on food, drinks and essentials. Add to it the premium one pays for poultry and meat, organic food, butter and fresh produce besides the cost of entertainment and leisure, commute, currency exchange rates and taxes. An inflation rate of 5.57 per cent adds to the woes.
The gap
Mercer’s International Policies and Practices Report on India came to a conclusion that 93 per cent of the companies are not compensating their expat employees suitably. Companies may use relevant details from the report to structure the salary reviewed methods.
Last year, in the HSBC'S Expat Explorer Survey 2017 India jumped 12 positions from its previous rankings to get a slot at the 14th position. In a list of 46 countries, Singapore got the top spot.
The rankings were based on the overall experience, including lifestyle, relocation, finance, tax, ease of doing business, etc. India has been ranked variedly on different parameters.
For example, in case of wage growth, India was at the 20th position while on the parameter of economic confidence the country ranked 10. When it comes to entrepreneurship, India was number four and seventh when it comes to career progression. Work-life balance is poor as India stands at the 38th position while in job security that rank is 20th.
Property and living
Renting or buying a property in India can be a tedious task for most expats. India stands at the 37th position on this parameter. In terms of safety, the ranking is 30. However, when it comes to a cosmopolitan living and assimilation or integration, India fares well, being third on the list. Also, expats find India suitable to provide education to their children, too. India is placed well at the 10th position on this parameter. In case of childcare quality the ranking falls to 16 and the overall cost of raising children stands at number 15. Even if the cost may look on the higher end, the report says, “India is home to the second largest percentage of high-earning expats in the world. In general, salaries go further and expats enjoy a higher standard of living than they did back home.” A good 31 per cent of these expats own a home in India and 49 per cent of these are in the age group of 35-54 years.
Salaries and employability
The report says that an expat's disposable income in India amounts to $176,408, annually. The top areas of work include construction and engineering, financial services, telecom, IT and internet.
About 27 per cent of these expats said that organising their finances was difficult during their early days in the country. This figure rose to 31 per cent for expats earning more than $2 lakh a year. Some of the biggest challenges that the survey mentioned was having financial commitments in both home and host country, juggling finances in different currencies, moving money between countries, having more money to manage, and dealing with a more complex tax situation.
Work and business
In the World Bank's 2017 Ease of Doing Business Survey, India was ranked at 130th position out of 190 countries. “Government bureaucracy and poor infrastructure are major obstacles, along with enforcing contracts and paying taxes,” the report read. It also says that while economic expansion has slowed over the past few years, the future remains bright and businesses continue to invest in the country. Industries that are flourishing include outsourcing, telecommunications, construction, education and retail.