[nitrous]

It all depends on the town and village.

[BaCkSeAtDrIVeR]

Originally Posted by Superleggera

(Just to note – this transfer was made as per B’s request).

Irrelevant.

Now they are not in good terms, and wants their land back. Now after exchanging their lands, what would the money that B owe A for rs.1 Lakh?

Interest @ 6% for 25 years.

Commercial interest rates are 18% or more. And have been as high at 26% in past 25 years. But 25 year govt. bonds used to give 6% oar less interest quarter of century back.

BTW, it is irresponsible of both parties to bicker in this manner. What would have happened if one of the parties had sold the land? IMHO both deserve 100 lashes in a very sensitive part of the anatomy for wanting to reverse a transaction which has stood or more than half of a man's productive life span.

[shankar.balan]

Flatly the value of 1 lakh Rupees 25 years ago was roughly equivalent to the value of 10 lakh Rupees today.
10 grand salary of even 18-19 years ago was equivalent to the Rs 1 lakh salary of today - given the amount of expenditure, the relevant value of commodities and other things in the marketplace.

This is capitalism spiralling completely out of control. Driven by greed, rampant consumerism and an ever increasing dependence on Credit / Loans to service the hungry spectre of consumption.

Where will this end?

Difficult to say. One thing is sure. the Rat race per se is constantly fuelled by the above. It is a Self perpetuating, Self propelled, Self sustained monster feeding ever increasingly upon itself.

[Aroy]

In 25 years prices have in general gone up 10-15 times. The exceptions are vehicles and white goods. The 1 lac rupee was supposed to offset the difference in valuation. Land prices have gone up much more, about 20-30 times. The best method is to get the valuation of both the plots of land and the cost difference exchanges hands.

[Superleggera]

thanks for the response mates.

Even I am not sure where this will end,but I am sure that sorting out the things will not be easy.

[roy_libran]

^^ All the best. Choose the one approach that does not bring in a fresh dispute into an already running dispute.

[siddutta]

Originally Posted by dhanushs

This is the aprrox value of average monthly income required for an average Indian family over the years. So that you can make a mental calculation of value of money in yesteryear, and well as the future.


Attachment 554047

i liked it. what is the source of this info ? i.e. is it your calculation or published by any economist/ analyst ?

[Guite]

I have been following this thread with interest. I don't quite agree with people who say 1 lakh remains 1 lakh, so to speak. That 1 lakh rupees is not just paper currency; it signifies value, and that value is the difference in value of land that both parties held at that time.

For the sake of argument let me put some figures to the original transaction:
Mr A had 60 cents of land in village valued at Rs. 2 lakh.
Mr B had 20 cents of land in town valued at Rs. 3 lakh.
So Mr A paid 1 lakh to Mr B and they exchanged land.

25 years down the line lets say the land in town has appreciated by 10 times = 10x3 = Rs.30 lakh.
Similarly, for the sake of argument, lets say village land has also appreciated by 10 times = 10x2 = Rs.20 lakhs

So you can see the difference. My point is that that Rs.1 lakh is not just Rs.1 lakh anymore after 25 years. I quite like the idea of equating that 1 lakh rupees to gold price then and now:- how much gold could that money buy then, and how much money will that gold fetch now. Considering the Indian fixation for gold, it could work. Just my opinion.

[roy_libran]

Originally Posted by Guite

I quite like the idea of equating that 1 lakh rupees to gold price then and now:- how much gold could that money buy then, and how much money will that gold fetch now. Considering the Indian fixation for gold, it could work. Just my opinion.

Absolutely. It is not just about the 'Indian Fixation'. It is about the fact that world currencies are all benchmarked against the Dollar (may not last forever, but still it is), and the dollar itself, is backed by Fort Knox (or rather the Gold in it). Hence, the most universally acceptable "Value" of money, at any given point in time, is the one against Gold.

[NetfreakBombay]

Originally Posted by roy_libran

and the dollar itself, is backed by Fort Knox (or rather the Gold in it).

Not anymore. This ended in 1971. No paper currency is backed by anything now (other than "trust").

Nixon Shock - Wikipedia, the free encyclopedia

[BaCkSeAtDrIVeR]

Feeling dirty naughty right now.

How about thinking of value some shares work 1 lakh back then, and their value now?

Say Cipla, Colgate-Palmolive or Tata Steel (then TISCO), or even Sundaram Finance?

Or may be other shares like Ambalal Sarabhai, Orkay SIlk, Usha Rectifier, etc??

:-D

[bblost]

Originally Posted by BaCkSeAtDrIVeR

Feeling dirty naughty right now.

How about thinking of value some shares work 1 lakh back then, and their value now?

Say Cipla, Colgate-Palmolive or Tata Steel (then TISCO), or even Sundaram Finance?

Or may be other shares like Ambalal Sarabhai, Orkay SIlk, Usha Rectifier, etc??

:-D

Or how about international shares like Enron or Indian shares like Satyam.

In the uncertainty of life, the money could have doubled or halved. No one knows what would have happened.

Hence in the absence of an agreement, its on destiny.
Since we cannot control destiny, the amount cannot be decided on. It would
be best to keep it at the original amount.

[kamboj]

Originally Posted by Superleggera

Experts, I would like to know what could be the value of Rs 1 lakh 25 years ago in terms of current market conditions?

Though various benchmarks like Gold, Sensex etc (even Petrol ) could be used but since transaction was related to land, I think price of same should be be used as benchmark in deciding current value of money.

Originally Posted by Superleggera

This is the scenario. 2 of my relatives A & B exchanged their lands 25 years ago, when they were in good terms.

One point here, if the land exchange was also done in papers i.e. proper ownership transfer was done, then why bother about reverting to 25yrs old status. Relationship has anyway gone sour (even reverting the land will not make it better), why take a hit on money/property front as well.

PS: As you said, such issues are not easy to sort out and they rarely have happy endings.

[Warwithwheels]

There is something called the technique of indexation. You can use this technique to get an approximation of the value 25 yrs back. This technique is also accepted in the legal world to calculate capital gains. Use the below formula to get the desired result.

Indexed cost = Cost X CII in the current year/ CII in the year of transaction.

Note: CII = Cost inflation index. It is available only for periods after 1981. You can find the CII chart here Cost Inflation Index meaning and Index for all the years

As per the table, CII for 1985-86 is 133 and 2010 - 11 is 711. Therefore the approximate value of INR 100000 25 years back should be 100000X711/133 = 5,35,000. Hope it helps!

[GordonGekko]

one lakh rupees 25 years ago = 50 lakh rupees in today's money.

just look at the property prices skyrocket. people have gotten rich sitting on their backsides. how the hell do you think there are so many luxury cars/cars in general on our roads.