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“An annual salary of 4,600,000 Japanese Yen converted using the regular exchange rate is equivalent to 3,000,000 INR, whereas the same salary conversion performed using the PPP exchange rate shows the equivalent salary to be around 800,000 INR,” the study says.
IIT Bombay Placements: According to a review of IIT Bombay’s placement data from the past five years, there are few differences between offers from abroad and those from within the country when the Purchasing Power Parity (PPP) currency rate is included. “The hype surrounding the one crore plus package is thus unwarranted,” the study adds.
The report shows that the median values of foreign and domestic packages differ by less than 10% based on PPP exchange rates.
The Centre for Policy Studies at IIT Bombay’s Namit Agrawal, Sailakshmi Sreenath, Shishir K Jha, and Anurag Mehra conducted the study. Instead of converting foreign currencies to their Indian equivalents using the financial exchange rate, it investigates the PPP rate, which is the rate at which the currency of one country would have to be translated to that of the other country to buy the same quantity of goods and services in each country.
Read about IIT Bombay Placement 2023
Underlining the PPP rate as a more “realistic way” of assessment, the study says: “Purchasing power parities (PPP) are the rates of currency conversion that are based on equalising the purchasing power of different currencies by accounting for the differences in price levels between countries. Official PPP conversion rates are based on assorted data.”
It provides an illustration to highlight the variations between the two approaches.
“An annual salary of 4,600,000 Japanese Yen converted using the regular exchange rate is equivalent to 3,000,000 INR, whereas the same salary conversion performed using the PPP exchange rate shows the equivalent salary to be around 800,000 INR,” the study says.
In order to analyze the kind of employment undergraduate students at their institution choose, researchers looked at placement data from IIT Bombay from 2014 to 2018. They considered placement data from 2,109 students, with replies from 269 of them.The highest median gross compensation was Rs 76,68,000 at IIT Bombay in 2017. After PPP adjustments, the median wage is Rs 21,57,624. According to the report’s authors, the use of the median wage for comparison was made possible because “extraordinarily high or low earnings, which only a few students earn, do not considerably influence the value of the median salary.”
The study also examined the buzz generated by major international offers during IIT Bombay campus placements.
With a few exceptions, domestic salaries are equivalent to those paid abroad, according to the study.
“All overseas offers made during campus placements require the students to relocate the base,” said Mehra, the study’s lead author. This means that the cost of his or her existence in a foreign place must be taken into account. If the candidate were to be earning that wage while residing in India, the straightforward multiplication way of equivalizing would have made sense.
The report claims that the “promised remuneration packages include base salary, performance bonus, joining bonus, and frequently stock units.” The sum of the fixed and variable components is the published package value. Since the Placement Cell’s salary package data does not reflect the real in-hand pay, these details are not reported by the media, which instead reports the big numbers, giving the public the impression that the wage packages are greatly inflated. The study’s data also reveals that the number of overseas offers has not exceeded 10% of all placements and that they are less varied in their streams than domestic offers, with the “lion’s share of the offers going to Computer Science (CSE) and Electronics (EE) branches.”
