At 6% annual inflation, a ₹1 crore target could lose more than half its purchasing power over 15 years, making future costs, not today’s headline figure, the key to setting savings goals.
Inflation can quietly reshape what a large sum of money is worth over time, and that is the key warning from a recent Business Today discussion about whether ₹1 crore will still be enough for long-term financial goals 15 years from now. Siddarth Sharma of MoneyTree Partners said investors should not anchor their plans to a single future figure without adjusting for rising prices, because the real buying power of that money may be far lower by the time they receive it.
Using an assumed annual inflation rate of 6%, Sharma said ₹1 crore received in 15 years would have the spending power of about ₹41.7 lakh today. That estimate underlines a basic point in financial planning: a target that looks large on paper can feel much smaller once inflation is taken into account. The Reserve Bank of India’s financial education material explains that inflation reduces purchasing power, meaning the same amount of money buys less as prices rise.
The practical response, according to Sharma’s advice in the Business Today video, is to define the goal first, estimate what it will cost in the future and then work backwards to determine how much must be invested regularly to reach it. The Securities and Exchange Board of India recommends the same disciplined approach to goal-setting, encouraging savers to make objectives specific, measurable and time-bound, and to budget around those targets.
SEBI also points investors towards online calculators for inflation, future value, compound interest and goal-based systematic investment planning, all of which can help translate a broad ambition into a realistic saving plan. In that framework, systematic investment plans, or SIPs, are useful because they allow regular investing in mutual funds, while step-up SIPs can increase contributions over time as income rises. Tata Mutual Fund says that structure may suit long-term goals such as education, retirement or buying a home, although returns remain market-linked and are not guaranteed.
For households trying to judge whether a future corpus will be enough, the message is clear: the headline number matters less than what it can actually buy. Inflation, not just investment returns, should shape the target, the monthly contribution and the review of any long-term wealth plan.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
