Inflation Calculator
See how inflation erodes your purchasing power over time. Free, privacy-first — inputs never leave your browser.
Details
Result
Future Cost
₹3,20,714
Purchasing Power Loss
₹2,20,714
Multiplier
3.21×
For estimation only. Not professional financial, tax, or legal advice. Consult a qualified advisor before making decisions. Full disclaimer.
Why inflation matters
India has averaged 6% CPI inflation over the last decade. At that rate, ₹1 lakh today will only buy ₹31,000 worth of goods in 20 years. Any investment returning less than inflation effectively loses you money. Use this calculator to see the future cost of today's expenses — especially useful for retirement planning.
Common questions about Inflation
What is India's long-term inflation rate?+
India's long-term CPI inflation has averaged 5.5%-6.5% over the past 20 years. RBI's mandate is to keep CPI at 4% (+/- 2%) — currently running at 4%-5%. Food inflation tends to be higher (6%-8%), while core CPI (excluding food/fuel) is steadier at 4%-5%. For goal planning, use 6% as a conservative base; 7%-8% for education/healthcare-specific goals which inflate faster than headline CPI.
How does inflation affect long-term savings?+
Dramatically. ₹1 lakh today will buy goods worth only ₹31,000 in 20 years at 6% inflation. A retirement corpus of ₹1 crore provides great comfort today but may equal only ₹31 lakh of 2046 purchasing power. Always plan in REAL (inflation-adjusted) terms: if you need ₹50,000/month in today's purchasing power post-retirement, the nominal target 20 years later is ₹1,60,000/month.
What is real return vs nominal return?+
Nominal return is the stated return; real return is nominal minus inflation. Formula: real = (1+nominal)/(1+inflation) − 1. A 7% FD with 6% inflation has just 0.94% real return. Equity at 12% nominal gives ~5.7% real return. For long-term wealth building, chase real returns, not nominal. Instruments that don't beat inflation (savings accounts at 3%-4%) are wealth-destroyers in real terms.
Which investments beat inflation reliably?+
Over long horizons (10+ years): equity mutual funds (historical real return 6%-7%), diversified international equity, real estate in growing metros, and gold (historical 7%-8% real return). Moderate beaters: PPF, EPF, NPS balanced (1%-2% real). Not inflation beaters: FDs, savings accounts, traditional endowment insurance. Rule: allocate at least 50% to inflation-beating assets for any 10+ year goal.
How does inflation affect EMIs and loan decisions?+
Inflation erodes the real burden of your EMI over time. ₹50,000/month EMI today may feel like ₹20,000/month in 15 years (adjusted for salary inflation). This is why long-tenure fixed-EMI loans feel lighter over time. However, this works only if your income tracks inflation. Floating-rate loans reset with interest rates, which often track inflation — muting this benefit.
Should I use CPI or WPI for inflation planning?+
Use CPI (Consumer Price Index) — it measures retail prices relevant to household consumption. WPI (Wholesale Price Index) tracks bulk/producer prices, useful for business/policy analysis but less relevant for personal finance. For specific goals, use sector-specific inflation: healthcare (10%-12%), education (8%-10%), housing (5%-8% depending on city). Never assume government-reported headline rate fits your personal basket exactly.