Chartered accountant breaks down USD vs INR: Are you really earning, or just surviving?

If you think that earning the US dollar makes you default, think again. Chartered Accountant Nitin Kaushik dismantles this illusion by the verification of the cruel reality. Your income is as strong as left after inflation, tax and depreciation of currency.

Let’s say you have $ 1,000. Inflation in the United States on average is about 5%, the amount costs $ 950 a year. Now transform it in INR and another problem hit. Indian rupee loses 4-5% of its value per year for the dollar.

It means a double blow, your dollar is losing the power in the United States, and your rupee loses the value home.

“But salaries in India are rising faster,” some claim. Kaurik does not agree, but says the trend is no longer reliable. “How many of you get 10% every year?” He asks. Even if you are, by growing taxes, both directly and indirect chip on real profits.

The result. Satisfaction of savings. India’s savings-GDP ratio fell at a low level of 50 years, even so many people join the workforce. More income, less holding.

This expansion gap has a deeper economic roots. Over the past decade, the US dollar has lost about 35% of its value due to inflation. But Rupee’s fall has even steeper, which is constantly depreciated by 3-5% per annum. The difference between interest rates, stronger US dollars, Indian trade and current account deficients and foreign investment leaks have been added.

Consumers already feel hit. In order to narrow down the festive budgets abroad, the real impact is shown in everyday choice. For Indian investors, it also means that higher revenues are needed just to keep inflation and currency erosion.

The collection of the chaush is sobering. Your income is not about how much you make – it’s about how much you hold. Hidden leakage and silent reduction in the world he asks the only question that is important. “Do you really grow wealth or just on the run?”