Glossary term

Inflation

Rise in the general price level. India headline CPI ~6%; medical inflation 12–14%. Erodes real returns.

Inflation is the rate at which the general price level of goods and services rises, eroding purchasing power. Indian headline CPI inflation runs 5–7%; medical inflation is dramatically higher at 12–14%; education inflation typically 8–10%.

Inflation is why ₹50,000/month today won't sustain the same lifestyle in 30 years. Long-term financial plans must inflate expense targets and discount nominal returns to get a 'real' (post-inflation) return. Equity has historically been the best inflation hedge over multi-decade periods.