ranjan

Market exchange rates, we often use fail to express the real purchasing power of Rupee in India while expresssing India's GDP per capita income in Dollar terms. But we all know that Dollar will purchase  less commodities in USA than what we purchase in India.Thus, an alternate technique is needed to expres India's economic fundamentals while expressing them in terms of US dollar.Apart from factors like interest rates, inflation there is another economic variable which is critically most important for the economic health and progress of every country.   An important term is the PPP (Purchasing Power Parity) method is indeed a typical tool to measure the same.. Under this method, purchasing power of currencies in different countries is used to measure exactly different economic indicators like GDP, Per capita income etc. PPP is defined as the number of units of a country's currency required to buy same amount of goods and services in domestic market as compared to one Dollar