Inflation Calculator
See how inflation eats your money's value. Find out what ₹10 lakh today will be worth — and how much you'll need to maintain the same purchasing power — in 10, 20, or 30 years.
Calculate Inflation Impact
What Is Inflation?
Inflation is the gradual rise in the general price level of goods and services in an economy. It means the same amount of money buys less over time. If a cup of chai costs ₹10 today and inflation is 6% per year, that same chai will cost about ₹18 in 10 years.
India measures inflation primarily through the Consumer Price Index (CPI), published monthly by the Ministry of Statistics. The Reserve Bank of India (RBI) targets 4% CPI inflation with a tolerance band of 2%-6%. The long-term average for India sits around 5.5%-6%.
How Is Inflation Calculated?
The future value of money under inflation uses the compound growth formula:
FV = PV × (1 + r)^n
- PV = Present (current) value
- r = Annual inflation rate (as decimal)
- n = Number of years
This calculator also shows the reverse view — the future value of today's purchasing power. ₹10 lakh today at 6% inflation needs to grow to ₹17.91 lakh in 10 years just to buy the same basket of goods.
Real-world impact: that ₹10 lakh, sitting idle in a savings account at 3%, would be worth only ₹13.44 lakh nominal — far short of the ₹17.91 lakh needed. You'd have lost ₹4.47 lakh in real terms.
Indicative Inflation Rates by Sector (India)
| Category | Typical Annual Inflation | Planning Notes |
|---|---|---|
| Headline CPI (overall) | 5.5% – 6% | RBI target 4% ± 2% |
| Food & Beverages | 5% – 8% | Volatile; weather-driven |
| Housing & Rent | 4% – 5% | Lower than headline |
| Healthcare | 10% – 14% | Use for retirement health corpus |
| Education (quality) | 8% – 10% | Use for child education planning |
| Fuel & Transport | 5% – 7% | Crude-oil linked |
| Long-Term Average | 5.5% – 6.5% | Use for retirement corpus |
How to Beat Inflation
- Invest in equity — equity mutual funds historically deliver 12%-15% CAGR, comfortably beating 6% inflation by 6%-9%.
- Avoid keeping large amounts in savings accounts — at 3% interest vs 6% inflation, you lose 3% in real value every year.
- Use SIPs for long-term goals — disciplined equity SIPs let your money compound at inflation-beating rates.
- Plan retirement with realistic inflation — assume 6%-7% headline inflation and 10%+ for healthcare.
- Diversify with gold and REITs — both have inflation-hedging characteristics.
- Think real returns, not nominal — a 7% FD at 6% inflation is barely 1% real return; a 12% equity return at 6% inflation is 5.66% real return.