Inflation is the rise in prices over time, eroding the purchasing power of money. The calculator works in both directions — projecting today's costs forward, or showing what today's value was worth in past years.
What is Inflation Calculator?
Inflation means money buys less over time. A ₹100 grocery basket in 2010 cost about ₹240 in 2026. The same money in your savings account, growing at 4%, cannot keep up — you have lost purchasing power even though the rupee number went up.
India's average retail inflation (CPI) over the past decade has been roughly 5.5-6%. Some years it spikes (2010, 2013, 2022); some years it dips (2017, 2018). Long-term planning should assume 6% as a baseline for non-discretionary spending.
Inflation matters most for retirement and long-term goals. ₹1 crore today is a comfortable retirement corpus; the same ₹1 crore in 30 years (at 6% inflation) is worth ~₹17 lakh in today's money. Plan accordingly.
Inflation math
- Current
- Today's value—amount in current rupees
- inflation
- Annual inflation rate—as decimal (6% = 0.06)
- n
- Years—duration over which inflation acts
How to use this calculator
Three inputs: amount, inflation rate, years.
Enter amount
Today's rupee amount you want to project forward (or backward).
Enter inflation rate
6% is reasonable for India long-term. Use 7% for healthcare and education (which inflate faster than CPI).
Enter years
Time horizon for the projection.
Inflation use cases
Retirement target setting
Project today's monthly expenses to retirement age. ₹50,000/month today might need ₹2.5 lakh/month in 25 years.
Children's education planning
Education inflation runs higher (8-10%). Project today's fee structure to the year your child enters college.
Salary negotiation
If your salary rose 5% but inflation was 6%, you took a real-terms pay cut. Use this to argue for a better hike.
Goal corpus calculation
Working backwards: if you need ₹1 crore in today's terms in 30 years, you actually need ₹5.74 crore at 6% inflation.
Glossary
- CPI (Consumer Price Index)
- Official inflation measure based on a basket of consumer goods.
- WPI (Wholesale Price Index)
- Inflation at the wholesale level. Different from CPI.
- Purchasing power
- What money can actually buy. Eroded by inflation.
- Real return
- Investment return after subtracting inflation. The number that actually matters.
- Hyperinflation
- Inflation above 50% per month (rare). Wipes out savings rapidly. India has not experienced this in modern times.
References
- RBI — Inflation outlook— Reserve Bank of India
- MoSPI — Consumer Price Index data— Ministry of Statistics