Inflation Calculator

India's CPI inflation has historically averaged around 5–7% per year. The RBI targets an inflation range of 4% ± 2%. Food inflation can be significantly higher. For long-term financial planning, using 6% as an average inflation assumption is considered prudent.

Inflation is the rate at which prices rise, reducing purchasing power. Interest rate is what banks offer on savings or charge on loans. If your interest rate is lower than inflation, your real return is negative — you are effectively losing money.

Real return = Nominal return − Inflation rate. For example, if your mutual fund earns 12% and inflation is 6%, your real return is approximately 6%. This is the actual growth in your purchasing power after adjusting for inflation.

Inflation is one of the biggest threats to retirement savings. A monthly expense of ₹50,000 today will require ₹1.6 Lakh/month after 20 years at 6% inflation. This is why building an inflation-beating retirement corpus through equity investments is essential.