Lesson 1 of 2 · 6 min
What inflation actually does
It is not that things get more expensive — it is that your money gets less powerful, and twenty years of an ordinary rate takes about two-thirds of it.
Ask anyone older than you what a cinema ticket or a plate of food cost when they were your age. The number they give you is not nostalgia — it is inflation, the rate at which prices climb, measured in India mainly by the Consumer Price Index and its basket of household buying.
The useful way to think about it is not "things cost more" but "my money buys less". At 6% inflation, ₹100 today buys what ₹94 buys a year from now. Over twenty years it buys about a third as much.
Two numbers worth holding
- Rule of thumb
- ~6%
- What ₹1 lakh becomes in 20 years
- ~₹31,000
A commonly used long-run planning assumption for India. Your own inflation depends on what you buy.
In today’s purchasing power, at 6%.
Work it out yourself
Put in a number that matters to you — a course fee, a wedding budget, a year of rent — and see it in twenty years.
Inflation CalculatorCheck yourself
1 / 3
Kabir asks
A ₹100 note sits in a drawer for a year while inflation runs at 6%. What changed?
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