Inflation at a Glance
- RBI inflation target
- 4% CPI (±2% band)
- Rule of 72
- Prices double in 72 ÷ rate years
- ₹1 lakh in 10 yrs at 6%
- Costs ₹1.79 lakh
- Formula
- Future = A × (1 + r)ⁿ
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What will your money be worth? Project future costs and past values at any inflation rate — with CPI explained for India.
RBI targets 4% CPI; recent Indian experience clusters near 5–6%.
Cost in 10 Years at 6%
₹1,00,000 today buys what ₹1,79,085 will buy in 10 years — purchasing power retained: 55.8%.
Prices Double In
11.9 yrs
Power Retained
55.8%
Rate Used
6% p.a.
| Year 1 | ₹1,06,000 |
|---|---|
| Year 2 | ₹1,12,360 |
| Year 3 | ₹1,19,102 |
| Year 4 | ₹1,26,248 |
| Year 5 | ₹1,33,823 |
| Year 6 | ₹1,41,852 |
| Year 7 | ₹1,50,363 |
| Year 8 | ₹1,59,385 |
| Year 9 | ₹1,68,948 |
| Year 10 | ₹1,79,085 |
| Years Ahead | Value |
|---|---|
| 1 | ₹1,06,000 |
| 2 | ₹1,12,360 |
| 3 | ₹1,19,102 |
| 4 | ₹1,26,248 |
| 5 | ₹1,33,823 |
| 6 | ₹1,41,852 |
| 7 | ₹1,50,363 |
| 8 | ₹1,59,385 |
| 9 | ₹1,68,948 |
| 10 | ₹1,79,085 |
Inflation is the sustained rise in the general price level — each rupee buys a little less every year. In India it is officially measured through the Consumer Price Index (CPI, base year 2012), compiled monthly by the Ministry of Statistics and Programme Implementation (MoSPI) from retail prices of food, housing, transport, health and education. The Reserve Bank's Monetary Policy Committee uses CPI to set interest rates under its flexible inflation-targeting mandate: 4% with a 2–6% tolerance band.
CPI tracks what households pay at retail shops and drive RBI rate decisions. WPI (Wholesale Price Index) tracks bulk factory-gate prices and matters more to producers. For household budgeting, retirement planning and salary hikes, always use CPI.
Divide 72 by the inflation rate to get price-doubling years: at 6%, prices double roughly every 12 years; at 8%, every 9 years. The calculator above shows the exact log-based doubling time for your rate.
A ₹1 crore retirement corpus sounds large until inflation is applied: at 6%, you need about ₹1.79 crore in 10 years and ₹3.21 crore in 20 years for identical buying power. That is why long-horizon goals must be planned in future rupees, not today's:
Money must compound faster than inflation after tax. Broadly, Indian households layer safety and growth: EPF/PPF/SSY for guaranteed tax-efficient compounding, and diversified equity (SIP) for long horizons where volatility smooths out. Fixed deposits near headline inflation barely break even once tax is deducted — fine for emergencies, poor for decades.
Method: discrete annual compounding, future = A×(1+r)ⁿ and past = A÷(1+r)ⁿ. Framework: RBI flexible inflation targeting (4% CPI ±2%); CPI series: MoSPI (base 2012). Figures are nominal and pre-tax — interest and capital-gains taxes reduce real returns. Educational estimates only, not financial advice; verify live CPI releases before decisions.
Reviewed by FinCalc Bharat · Last updated: September 2026.
Inflation is the rate at which the general price level rises, eroding what each rupee buys. At 6% annual inflation, something costing ₹100 today costs about ₹179 in 10 years — your money loses roughly 44% of its purchasing power over that decade.
The Reserve Bank of India's Monetary Policy Committee targets CPI inflation of 4% within a 2–6% band. Inflation persistently above 6% triggers rate action; below 2% would signal weak demand. For planning, 6% is a prudent long-run assumption for household expenses.
CPI (Consumer Price Index, base year 2012) tracks retail prices households actually pay — food, housing, transport — and drives RBI policy. WPI tracks wholesale/bulk goods prices and matters more to producers. For personal finance, CPI is the relevant number.
Divide 72 by the inflation rate to get the years for prices to double: at 6%, prices double in about 12 years; at 8%, in 9 years. This calculator shows the exact doubling time (log-based) alongside every result.
Switch to Past value mode: enter today's amount, the historical inflation rate and the years. At 6%, ₹1,00,000 today had the buying power of only about ₹55,839 ten years ago — and conversely, ₹1,00,000 then would need ₹1,79,085 today.
Money must grow faster than inflation after tax. Fixed deposits near 7% barely beat 6% inflation before tax; equities, EPF/PPF and SSY have historically delivered positive real returns over long horizons. Match the instrument to the goal's time frame.
No — it shows pre-tax nominal values. Interest and capital gains are taxed (FD interest at slab rates, equity LTCG above the exemption), which lowers real returns. Treat results as the starting point, then haircut for your tax slab.
Rarely and briefly — India has seldom seen sustained deflation. Persistent falling prices sound pleasant but signal collapsing demand and rising unemployment, which is why central banks target low positive inflation instead of zero.
Not financial advice. Projections use the rate you enter and ignore taxes, fees and rate changes over time. Consult a SEBI-registered investment adviser for personalised planning.