Calculate purchasing power impact of inflation over time
Built & maintained by Pappu Venkata Subbi Reddy, founder of Clacify · Formulas verified against official Indian government sources
The Inflation Calculator shows how inflation erodes the purchasing power of money over time using India's Consumer Price Index (CPI) trends. Enter an amount and a time period, and it reveals what that money will be worth in real terms in the future — or how much you will need in the future to match today's buying power. With India's CPI inflation averaging roughly 5–6% a year, ₹1 lakh today will buy only about ₹61,000 worth of goods in ten years. This makes the tool essential for retirement planning, setting realistic investment goals, and understanding why money left idle in a low-interest account quietly loses value.
Future cost is computed with compound inflation: Future Value = Present Value × (1 + inflation rate)^years. To find the present-day equivalent of a future amount, the tool reverses this: Present Value = Future Value ÷ (1 + rate)^years. Loss of purchasing power is expressed as the percentage decline in what a fixed sum can buy. The default rate reflects India's long-run average CPI inflation (around 5.5%), but you can enter any rate to model optimistic or pessimistic scenarios. CPI is published monthly by MOSPI; using a realistic long-term average gives more useful planning numbers than any single year's figure.
If your savings earn less than the inflation rate, your purchasing power decreases even as the nominal value grows. Example: ₹1 lakh in a savings account at 4% interest when inflation is 6% loses 2% of real value per year. After 10 years, the real purchasing power falls to about ₹82,000 in today's terms. This is why financial advisors recommend equity investments that beat inflation over the long term.
India's CPI inflation for FY 2025-26 is approximately 4–5% annually, within the RBI's target band of 2–6%. Fuel and food inflation (especially vegetables) can spike higher in specific months. The RBI adjusts repo rates to control inflation — higher rates slow spending and reduce inflation.