Mumbai is world's second least expensive city

A high rate of inflation may be pinching hard on day-to-day life of people in the country, but a global survey has named two Indian cities — financial hub Mumbai and national capital New Delhi —among the four least expensive places across the world. In the worldwide ‘cost of living’ survey by the Economist Intelligence Unit , Mumbai is the second least expensive city globally, while New Delhi is ranked fourth.

Karachi in Pakistan has been named the cheapest destination globally, while Zurich in Switzerland is the most expensive place across the world, says the survey.

Inflationary pressures have figured among the key concerns facing the government as well as the public in India for many months now, although the rate of inflation has declined a bit in recent past. The country's headline inflation fell to 6.55 per cent in January. It had stood at 7.47 per cent in December 2011. Despite the drop in inflation in January, finance minister Pranab Mukherjee had said the rate of price rise is still not at acceptable level and hoped for a further dip. Headline inflation was near double digit for most of 2010 and 2011.

The apex bank hiked key policy rates 13 times, totalling 350 basis points between March 2010 and October 2011, to tame inflation. In the EIU survey, three of the four cheapest locations globally -- Karachi, Mumbai, Tehran and New Delhi -- are from the Indian subcontinent. "India has been such a target of labour outsourcing, relocation and FDI over the last decade," EIU said. "With cheap labour and land costs making India and Pakistan incredibly attractive to those bargain hungry visitors or investors willing to brave some of the security risks that accompany such low prices, especially in Pakistan," it added. All the four cheapest cities have retained their positions from the previous year's list. However, Zurich has toppled Tokyo as the world's most expensive city, although both of them have become relatively expensive in the past one year. "Both Japan and Switzerland have seen strong currency movements over the last few years which have made them relatively more expensive," EIU said.

After Karachi, Mumbai, Tehran and New Delhi, the report has named Muscat, Dhaka, Algiers, Kathmandu, Panama City and Jeddah among the least expensive cities. In the list of ten most expensive cities, Zurich and Tokyo are followed by Geneva, Osaka Kobe, Oslo, Paris, Sydney, Melbourne, Singapore and Frankfurt. The survey compared over 400 individual prices across 160 products and services. They include food, drink, clothing, household supplies and personal care items, home rents, transport, utility bills, private schools, domestic help and recreational costs.