Thursday, September 29, 2011

Lakhs and Crores

There are, to the American ear, odd units of measure in India that are generally accepted and widely used especially when it relates to money. If you don't understand these measures, then, well, you really haven't spent much time in India.

The Lakh
A lakh is equal to a hundred thousand. If someone were to make one million rupees in a year, they wouldn't say, "my salary is one million rupees." Instead, they would say, "my salary is ten lakh." Since one U.S. dollar is currently worth 48.94 rupees, one lakh rupees is equal to $2,043. One of the easiest ways to gain credibility with a salesman in some sort of higher end store (like for a rug or jewelry or whatever) is to ask for prices in rupees and to subsequently not bat an eye when they quote a price of something like 1.2 lakh rupees. Granted, I try to stay away from such stores, but it's a good skill set to have nonetheless.

(Quick note, I would appreciate if no one would tell my wife the exchange rate has shifted so far in the U.S. dollar's favor (I know I'm not going to). It's hovered around the 45:1 mark for the past two years. Whenever she's trying to justify purchasing something, she uses an exchange rate of 50:1 in her head and then says, "see, this isn't so bad". Me, being ever the practical one, tries to get her to use a very conservative exchange rate of 40:1. If she still wants that something at a conservative 40:1 rate, it seems like a good purchase.)

One final thing about the lakh; based on the unit of measure, you'll often see commas in weird spots in Indian numbers. Rather than writing 500,000, they will write 5,00,000 to highlight that half a million is really five lakhs.

The Crore
Not nearly as widely used, primarily based on the denomination, is the crore. A crore is equal to one hundred lakh, which is to say that a crore is ten million. Following the same conversion rate from above, one crore rupees is equal to $204,300. The most common uses for this denomination are to describe corporate earnings, expensive real estate, levels of corruption in the economy, or the winnings of the kid in Slumdog Millionaire.

Lakhs seem much more natural to me, which I'm sure is based on the frequency of usage. Crores are still a little foreign, even though the general rule is "multiply a lakh by a hundred." I just hope I'm smart enough, if given the opportunity, to use a a term like 1.2 crore appropriately rather than telling someone it's 120 lakhs.

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