Inflation Calculator

India's consumer price inflation averaged roughly 5% a year over the decade to 2025, and the RBI targets 4% CPI inflation within a 2–6% tolerance band. This calculator defaults to 6%, the upper edge of that band, which builds in a margin for long horizons and for personal expense baskets that inflate faster than the headline index. Any assumed rate is a planning input, not a forecast.

At 6% annual inflation — this calculator's default — an expense of ₹50,000 today compounds to roughly ₹89,542 in 10 years, about a 79% rise. At 4% it would reach about ₹74,012, and at 8% about ₹1,07,946. The spread between those figures is why the inflation assumption matters as much as the expense itself in any long-term plan.

Yes. Each year's price increase applies to the previous year's already-inflated price, not the original one, so inflation follows the same compound-growth formula as an investment return — just working against purchasing power. A practical consequence: at 6% inflation, prices roughly double every 12 years (the rule of 72), so a 36-year horizon spans about three doublings, an eightfold rise in costs.

Headline CPI is a weighted average across a full consumption basket, so individual categories can run well above or below it. Education and healthcare are service-heavy — their costs are dominated by wages, which tend to rise faster than goods prices — and demand for both keeps growing. Planners therefore often model such goals at a higher rate than general inflation, which is a rate this calculator lets you set directly.

A nominal return is the headline growth rate of an investment; the real return is what remains after inflation, which is approximately the nominal return minus the inflation rate. An investment earning 10% while inflation runs at 6% grows purchasing power by only about 4% a year. Real returns are the figure that determines whether wealth is actually accumulating, since expenses inflate while the money compounds.