Inflation Calculator
See what today's expenses may cost in the future and how much your cash buys later.
Inflation and purchasing power in India
Inflation is the rise in prices over time. This calculator shows two sides of the same coin: how much today's expense may cost later, and how much purchasing power a fixed cash amount loses if it sits idle.
How to use this calculator
Enter a current cost such as monthly rent, a college fee, or a holiday budget. That becomes the base amount.
Set an expected inflation rate. India's retail CPI often lands near 4% to 6% over long stretches, but education, healthcare, and city rents can grow faster. Use 6% as a base and 8% as a stress case for goal planning.
Choose the number of years until you need the money. Retirement, child education, and home upgrades are classic long horizons where inflation quietly doubles costs.
Read both results. Future cost tells you the inflated price tag. Purchasing power tells you what today's idle cash can still buy after the same years. If your FD or debt fund return is below inflation after tax, real wealth shrinks even when the balance grows in rupees.
Pair this tool with the SIP, retirement, or compound interest calculators. Nominal returns look strong until you subtract inflation. Real return ≈ nominal return − inflation is a rough mental check for long goals. Re-run the projection every few years when your goal amount or timeline changes.
Inflation formulas used here
Future cost = Present × (1 + i)^n Purchasing power = Present / (1 + i)^n i = annual inflation rate n = years Example: ₹1 lakh expense at 6% inflation for 10 years. Future cost ≈ ₹1.79 lakh. ₹1 lakh cash left idle buys only about ₹55,800 of today's goods after 10 years.
Frequently Asked Questions
What inflation rate should Indians use?
Many planners use 5% to 6% for general expenses. Education and medical goals often need 7% to 10% assumptions.
CPI vs WPI?
CPI tracks consumer prices and is the usual household reference. WPI tracks wholesale prices and can diverge in a given year.
Does this use official CPI history?
No. You enter the rate. Official series help pick assumptions; this tool projects forward from your inputs.
How does inflation hit retirement?
Expenses rise every year in retirement. A corpus that looks large today must grow or be drawn carefully so withdrawals keep pace with prices.
FD returns vs inflation?
If post-tax FD return is below inflation, real purchasing power falls even though the account balance rises.
Salary hikes and inflation?
Hikes that match inflation protect take-home purchasing power. Hikes below inflation mean you can buy less each year.
Gold as inflation hedge?
Gold often rises with prices over long periods but can lag or fall for years. Do not treat it as a perfect short-term hedge.
Use with SIP goals?
Inflate the future goal cost first, then run a SIP calculator to see the monthly amount needed to hit that inflated target.
Deflation possible?
Prices can fall in rare periods, but long-term Indian household planning still assumes positive inflation. Do not model zero inflation for decade-long goals.
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