Archive for November, 2009
Return to INDIA (R2I as they say) !! – Part 5
The expensive new world and the inexpensive old world
Most folks coming back to India or rather to be more specific Bangalore, would say that it has become outrageously expensive to live here. There is definitely a lot of truth in that statement.
Daily lunch in a decent restaurant such as Shanti Sagar/Sukh Sagar costs around 200-250 bucks for the two of us. A cab trip from one part of the town to another costs you close to 300-400 bucks. I have heard that a movie outing would loosen your wallet by at least 500-1000 bucks (though we haven’t had a chance to go out..too busy settling in). Baristas and Coffee day would easily throw you back by 100-200 bucks for the bare minimum. When it comes to big-ticket items, a 42+inch LCD TV costs 60K-1 lakh for good brands; LED’s cross the lakh mark. (but still if you are coming back, don’t buy a TV there, buy it here. You will help the economy here + the customs guy will slap a 15% duty anyways + LCD Tv’s are the most stolen item during shipping)
Our good old desi cars in the US – the Honda civics, city et al are the top-notch cars an urban middle-class double income family can think of buying at this time. They range from 6-7 lakhs for the Jazz model to 10-15 lakhs for the city/civic models. House prices are the killers. A good three bedroom in a good locality with good amenities would cost you at the very minimum 70 lakhs !! It’s very common to see crore plus advertisements for apartments. Here’s the icing on the cake. The supposed good pre-schools and kindergartens cost upwards of 70K/annum. My whole of engineering including tuition, mess bill, hostel fees and miscellaneous items did not cost my dad more than 2 lakhs and here they are talking about first grade for a lakh/annum !!
Now I am sure you would have heard these numbers before from people here. I had heard it too. But sitting in the US you can’t help but actually feel a little bit proud that India is growing (inflation most of the times is seen as a sign of growth). Also with the USD salaries there all of these would seem reachable, but trust me once you land here and put all of these things together you would see the plush INR salary that you negotiated and which you thought should hold good would no longer seem enough.The problem is that these prices are comparable with the US prices and in many cases equal in terms of absolute conversion. But in terms of cost of living index, the prices kill you.
A good mattress in the US costs $600 which for a $80K plus income turns out to be 1/8th of the monthly take home. Here the same thing costs Rs 20K which is 1/3rd of a comparable salary. These are the numbers that I am staring at in the next few months -
If you buy a house and take a loan you can change the rent above to 1/100th of the loan you take. So say you take loan of 50 lakhs, then your mortgage would be around 50K which brings your expenses close to 1 lac/month which in turn requires a salary of at least 22-25 lakhs/annum. Remember this means no saving except for your house. Did I just prove that a 22-lakh/annum salary means no saving? Welcome to the new INDIA. I hope these numbers help people in their salary negotiations depending upon their lifestyles.
Now of course, this is the expensive side of Bangalore and the lifestyle that we chose to live. Coming back from the US, you are in the NRI mode and you tend to close the gap between what you chose to leave back in the US with what you get here. In trying to close the gap you tend to lean towards the premium aspects of the Indian society and therein lies the quandary. But there is also the inexpensive side or the old Bangalore. You could very well live in Bangalore by spending half the amount mentioned above. You could rent a house for 5k, 10K, 15K or even for 50K. You could chose not to have maids or drivers. In fact, maids and drivers are a luxury in the US. You could avoid going to the malls and shop in the local market. You can avoid the cabs and take the volvo buses (fantastic buses they are by the way). You could buy your groceries from the local bania instead of going to MORE or Big Bazaar.
But I can bet you that you wouldn’t do that when you are here. We (speaking for the new generation) have moved on from the lifestyle lived by our parents most of their lives (In fact our parents have moved on too). We are no longer the penny-pinching kind. We have started living tomorrow’s life today.
I am not sure if this is good or bad. But this is what I see here. Hopefully we have a better end than what US has/is going through. 
PS: Debit cards and not credit cards are the norm here. That is in a way good right? You wouldn’t rack up huge credit card bills.
Return to INDIA (R2I as they say) !! – Part 4
State Bank Of India Zindabad !!
Today I got a pleasant surprise from none other than the behemoth State Bank Of India. In this day and age of privatized banks, with their doorstep service and “customer is king” motto, I had expected smooth sailing with the likes of ICICI and HDFC banks. I was proven wrong. It’s been close to 10 days since we have arrived here, but I still haven’t been able to see the light of ICICI or HDFC accounts. All the while I was staying away (actually dreading) from the shanty SBI branch close to my home.
Let me first go over the hassles I faced with ICICI. First thing, these guys coaxed me into the 3-in-1 account (Demat, trading, savings account). I thought why not. If these guys can take care of all the hassles behind the scene, then I might as well get all of them. But the point that these guys didn’t tell me and which was the most important thing for me was that a 3-in-1 account takes 15 day to process. If they had told me that I would have certainly asked them to prioritize the savings account and later thought about a 3-in-1. I do agree that they did make my life easier for me for something that I would have required a month later. But they certainly missed the point of what the customer came to them in the first place.
With HDFC, the problem was with the NRE account check that I gave them to open the account. Apparently their back operations came back with a query as to why an NRI is opening a savings account in India. Well it is a genuine question, but then what would you expect an NRI to do if he doesn’t have a bank account (and an address proof, a PAN card, a voter’s ID card, a telephone bill, a credit card statement, a bank statement !!). Anyway the guy helping me said that a letter to that effect from me should suffice. I said **** it….just take cash and get me the account! So I guess I should get the account early next week.
Now listen to this. It’s been 10 days and my dad must have told me at least 10 times to go to SBI and open an account. He said they will do it in a day. I said if ICICI and HDFC can’t give me an account in 10 days, SBI can never do it. Lo behold…I was in a for a big surprise. I went to the SBI branch. (It’s still looking a bit like the old SBI, but I don’t care). The inquiry guy gave me a form to fill up. The only hassle there was an introductory form (as part of their Know Your Customer policy, they need a referral). I came back home, got a signature from my mom, went back, submitted the form. They immediately processed it and gave me an account number. I deposited Rs 1000/- (no Rs 10K, 5K minimum requirements like HDFC, ICICI) and that was it. The entire thing took me 1 hour elapsed. Of course, you can still see the inquiry guy disappearing for lunch and the guy whom you need next is not sitting at his desk when you go to him. But all that was momentary. I had an open account into which I could deposit money in one hour period. Something that ICICI and HDFC could not do. Period.
So for all NRI’s out there planning to settle back – Please go to the nearest SBI branch the second day you land and get an account opened. You should have your ATM card and cheque book in 4 days from the day of opening.
Another thing – Please be consistent with your signatures. Indian banks are very very very particular about signatures unlike the US ones. Because people forge signatures more often, banks take extra precautions to protect the interests of the customers. Unfortunately, customers like me, who have bad handwriting added with signature consciousness (I get conscious when I sign a document which makes my signature inconsistent each time), have a hard time because of this. They even refuse to give you money unless you can prove that you are really you.
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