💰 Personal Finance & Loans
Inflation Calculator
Estimate the future cost of a purchase under inflation.
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Estimate the future cost of a purchase under inflation. This dedicated page is built for fast, clean calculations and search visibility.
Enter your values, click calculate, and see the result instantly. The page uses a simple, focused layout to improve usability on mobile and desktop.
How to use this calculator
- Open the inflation calculator page.
- Enter the required values in the form fields.
- Click Calculate to see the result and breakdown.
- Use the related links to explore similar tools.
Results are estimates. For lending, taxes, trading, nutrition, or medical decisions, verify with a qualified professional.
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How inflation erodes purchasing power
Inflation is the rate at which prices rise over time, reducing the purchasing power of money. At 6% annual inflation (India's long-run average), ₹1 lakh today buys what ₹74,726 buys in 5 years, and what ₹55,839 buys in 10 years. Your money loses nearly half its purchasing power in a decade at this rate if kept idle.
India's inflation is measured by CPI (Consumer Price Index) reported monthly by MOSPI. Food and beverages (45% weight in CPI) have historically inflated faster than general CPI. Medical inflation runs at 8–12% annually — meaning real healthcare costs grow far faster than the headline number.
Inflation impact by category
- Food and groceries: 7–9% historically, volatile due to monsoon and supply shocks
- Education fees: 8–12% annually at private schools and colleges
- Healthcare: 8–15% — the fastest-inflating major expense category
- Housing (urban rent): 5–8%, varies significantly by city
- Electronics and technology: Often deflationary — prices fall as technology improves
To preserve purchasing power, your investments must return more than inflation after tax. FDs at 7% with 30% tax bracket net only 4.9% — below 6% inflation. Equity mutual funds (10–12% long-run CAGR) comfortably beat inflation over 10+ year periods.
Frequently asked questions
What inflation rate should I use for financial planning in India?▼
Use 6–7% for general expense planning and 8–10% for healthcare, education, and urban housing. India's CPI averaged approximately 5.5–6.5% from 2015–2024. For conservative planning, use 7% across all categories. For medical goals or college fee planning, use 9–10% because these costs have historically outpaced general CPI.
How does RBI's inflation target affect my savings?▼
The RBI targets CPI inflation at 4% (±2%). When inflation is above target, the RBI raises repo rates, which increases FD rates and home loan rates. When inflation cools, rate cuts tend to follow, lowering returns on fixed income. This is why inflation directly affects the interest you earn on savings accounts and FDs.
Is gold a reliable inflation hedge in India?▼
Historically, gold has roughly tracked Indian inflation over 20–30 year periods, preserving purchasing power but not growing it significantly. Gold returns are highly volatile year-to-year. Sovereign Gold Bonds offer 2.5% coupon + gold price appreciation with no storage cost, making them superior to physical gold for long-term holding.
How much will my monthly expenses be at retirement?▼
Use the inflation calculator with your current monthly expenses, expected inflation rate (6–7%), and years to retirement. Example: ₹50,000/month today at 6% inflation reaches ₹89,542 in 10 years and ₹1,60,357 in 20 years. This future expense figure is what your retirement corpus must sustain — multiply by 12 for annual expenses, then by 25 for the corpus required.