This is an online tool to calculate India's inflation between the years 1971-2016 based on Consumer Price Index
A brief note on how we made Inflation Calculator India
The Idea:
When we googled for an India's Inflation Calculator, we could not find one for India with clear explanation on how the calculations are made. So, we embarked on the task of creating a reliable inflation Calculator that users can both understand and trust*.
Choosing the Index:
Any inflation calculator is based on an index, and India has quite a few indexes to choice from. Historically inflation is measured based on Wholesale Price India(WPI) in India. However, in April 2014 RBI announced that inflation will be measured based on new CPI(Consumer Price Index) started in 2010. In india the gap between rich and poor is wide, and has sections of society with contrasting standards of living. No single CPI can measure inflation for various income groups. Hence, India measures CPI separately for Industrial Workers(CPI-IW), Agricultural workers(AL) and Urban and Rural. For the purpose of this calculator, we have used Urban CPI as these are the section of people who are most likely to use this Calculator.
The Challenge:
Once we decided on the Index it should have been a cake walk to implement it! Once we started looking for CPI data the trouble started. We could not find a single CPI that goes back to 1970s. Every 5 to 10 years, RBI decides start a new Index base line . We could simply picked up the latest new CPI which started on 2010 and our life would have be much easier. However, it would have added little value to the users, would it not be interesting to know see the value of your high school pocket money in today's money!!
Solution:
We combined to the different RBI CPI indices of different period to make a single index which to scale up to the New CPI(Refer the table to the right of this page ). This combined index is used by the calculator to calculate inflation adjust amounts.